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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-K
 
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the Fiscal Year Ended September 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the Transition Period from  to
 Commission File No. 001-15795
 
 RENTECH, INC.
  Colorado
    
    84-0957421(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 10877 Wilshire Boulevard, Suite 710
Los Angeles, California 90024
 (310) 571-9800
 
 Securities registered pursuant to Section 12(b) of the Act:
Common Stock
Name of Each Exchange on Which Registered: NYSE Amex
Securities registered pursuant to Section 12(g) of the Act:
None
 
 Yes
o No
þ
 Yes
o No
þ
 Yes þ No o
 Yes
o No
o
 o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller
reporting company)
 Yes
o No
þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



TABLE OF CONTENTS
 PagePART IITEM 1. Business
    
    
    4ITEM 1A. Risk Factors
    
    
    15ITEM 1B. Unresolved Staff Comments
    
    
    24ITEM 2. Properties
    
    
    25ITEM 3. Legal Proceedings
    
    
    25ITEM 4. Submission of Matters to a Vote of Security Holders
    
    
    25PART IIITEM 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    26ITEM 6. Selected Financial Data
    
    
    28ITEM 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    29ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    49ITEM 8. Financial Statements and Supplementary Data
    
    
    50ITEM 9. Changes in and Disagreements With Accountants On Accounting and Financial Disclosure
    
    
    94ITEM 9A. Controls and Procedures
    
    
    94ITEM 9B. Other Information
    
    
    95PART IIIITEM 10. Directors, Executive Officers and Corporate Governance
    
    
    96ITEM 11. Executive Compensation
    
    
    96ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    96ITEM 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    96ITEM 14. Principal Accountant Fees and Services
    
    
    96PART IVITEM 15. Exhibits and Financial Statement Schedules
    
    
    96Exhibit 10.26Exhibit 10.27Exhibit 10.35Exhibit 21Exhibit 23.1Exhibit 23.2Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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FORWARD-LOOKING STATEMENTS
    RESTATEMENT
       3




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PART I
 
 ITEM 1. BUSINESS
 Company Overview
         4




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Business Strategy
  Develop, Co-Own and Operate Model
 Biomass Facilities
 Fossil Facilities
 Licensing Model
   5




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Commercial Opportunities
   Research and Development Program
   Financial Information About Our Business Segments
  Our Proprietary Rentech Process
   6




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Development of the Rentech Process
     Competition in Fischer-Tropsch Technology
   Rentech-SilvaGas Technology
   7




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Development of the Rentech-SilvaGas Technology
  Competition in Biomass Gasification Technology
   Products and Markets
   
    
    RenDiesel, RenJet, naphtha and power from fossil resources;
 
    
    renewable RenDiesel, RenJet, naphtha and power from biomass resources; and
 
    
    waxes, paraffins and specialty chemicals.
  Clean Air Regulations
   8




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Government Incentives
  2 2 2
        9




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Business of Rentech Energy Midwest Corporation
 Production Facility
    CapacityPlant
    
    (Tons per Day)Anhydrous Ammonia
    
    
    830UAN Blending
    
    
    1,100Ammonium nitrate
    
    
    600Urea synthesis
    
    
    400Urea granulation
    
    
    140Nitric acid (2 plants)
    
    
    380Carbon Dioxide (2 plants)
    
    
    650
 Products
  Anhydrous Ammonia.
  UAN.
  10




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Urea.
 Nitric Acid.
 Carbon Dioxide. 2 2 2 2 2 2 2 2
 Marketing and Distribution
 2
 Seasonality and Volatility
   11




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For the Fiscal Years Ended September 30,2009
    
    
    2008
    
    
    2007
    
    
    2006(in thousands of tons)First Quarter
    
    
    115
    
    
    
    171
    
    
    
    160
    
    
    
    78Second Quarter
    
    
    65
    
    
    
    103
    
    
    
    77
    
    
    
    74Third Quarter
    
    
    203
    
    
    
    170
    
    
    
    209
    
    
    
    172Fourth Quarter
    
    
    150
    
    
    
    199
    
    
    
    125
    
    
    
    167Total Tons Shipped for Fiscal Year
    
    
    533
    
    
    
    643
    
    
    
    571
    
    
    
    491
  Raw Materials
   Transportation
   12




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Competition
  Intellectual Property and Patents of the Company
    ® ® ® ® ® ®
    13




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Regulation
     Implementation of Carbon Dioxide Emissions Reduction Strategy
     14




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Employees and Labor Relations
  Available Information
  
 ITEM 1A. RISK FACTORS
  Risks Related to Our Liquidity, Financial Condition, and Results of Operations
 Our liquidity and capital resources are limited. We must raise substantial additional capital to
execute our business plan and, in the event that currently expected sources of funding are not
available, to fund working capital and to continue our operations.
   Until 2009, we had never operated at a profit. If we do not achieve significant amounts of
additional revenues and become profitable on an ongoing basis, we may be unable to continue our
operations.
   15




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REMCs operations may not be profitable and may require substantial working capital financing.
  Our level of indebtedness could adversely affect our ability to raise additional capital to fund
our operations, limit our ability to react to changes in the economy or our industry and prevent
us from meeting our obligations.
  
    
    increasing our vulnerability to general economic and industry conditions;
 
    
    requiring a substantial portion of our cash flow from operations to be dedicated to the
payment of principal and interest on our indebtedness, therefore reducing our ability to use
our cash flow to fund our operations, capital expenditures and future business
opportunities;
 
    
    limiting our ability to obtain additional financing for working capital, capital
expenditures, debt service requirements, acquisitions and general corporate or other
purposes;
 
    
    requiring prepayments of principal and interest under the Senior Credit Agreement in an
amount equal to distributions and loans made by REMC to its shareholders, including Rentech;
 
    
    incurring higher interest expense in the event of increases in the Senior Credit
Agreements variable interest rates;
 
    
    limiting our ability to adjust to changing market conditions and placing us at a
competitive disadvantage compared to our competitors who have greater capital resources;
 
    
    limiting our ability to make investments, dispose of assets, pay cash dividends or
repurchase stock; and
 
    
    subjecting us to financial and other restrictive covenants in our indebtedness, the
failure of which to comply with could result in an event of default.
   16




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Continued recessionary conditions and the relative unavailability of credit have made it more
difficult for companies to secure financing. If we are unable to access financing on terms and at
a time acceptable to us for any reason, it could have a material adverse effect on our operations,
financial condition and liquidity.
  The issuance of shares of our common stock could result in the loss of our ability to use our net
operating losses.
   We may not be able to successfully manage our growing business.
  We could be subject to additional risks and uncertainties as a result of the restatement of
our consolidated financial statements.
  We have disclosed a material weakness in our internal control over financial reporting, which
could adversely affect investor confidence, impair the value of our common stock and increase our
cost of raising capital.
   17




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Risks Related to the Rentech Process and the Rentech-SilvaGas Technology
 We and our potential licensees may be unable to successfully implement the Rentech Process or the
Rentech-SilvaGas Technology at commercial scale synthetic fuels plants.
  
    
    higher than anticipated capital and operating costs to design, construct or reconfigure
and operate a plant using the Rentech Process;
 
    
    reaction activity different than that demonstrated in laboratory, pilot, and
demonstration plant operations, which could increase the amount of catalyst or number of
reactors required to convert synthesis gas into hydrocarbons;
 
    
    shorter than anticipated catalyst life, which would require more frequent catalyst
replacement or addition, catalyst purchases, or both;
 
    
    insufficient catalyst separation from the crude wax product stream could impair the
operation of the product upgrading unit;
 
    
    product upgrading catalyst sensitivities to impurities in the crude synthetic fuel
products, which would impair the efficiency and economics of the product upgrade unit and
require design revisions; and
 
    
    higher than anticipated costs for the catalyst and other materials used to operate a
plant using the Rentech technologies.
  We could have indemnification liabilities to potential licensees of our technology.
  
    
    use of patent rights and technical information relating to the Rentech Process or the
Rentech-SilvaGas Technology;
 
    
    failure of our technology to perform according to guaranteed specifications; and
 
    
    acts or omissions by us in connection with our preparation of preliminary and final
design packages for the licensees plant and approval of the licensees construction plans.
   18




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Our success substantially depends on the performance of our management team, project development
team and technology group. The loss of key individuals within these groups would disrupt our
business operations.
  Our success depends in part on our ability to protect our intellectual property rights, which
involves complexities and uncertainties.
   Our technology may not compete successfully against technologies developed by our competitors,
many of whom have significantly more resources.
   19




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A reduction in government incentives for FT fuels or energy from biomass, or the relaxation of
clean air requirements, could materially reduce the demand for FT fuels or energy from biomass.
  Industry rejection of the Rentech Process or the Rentech-SilvaGas Technology would adversely
affect our ability to receive future license fees.
   Changes in existing laws and regulations, or their interpretation, or the imposition of new
restrictions relating to emissions of carbon dioxide may give rise to additional compliance costs
or liabilities and could materially reduce the demand for FT fuels or the Rentech Process which
could, in turn, have a material adverse effect on our business, financial condition, results of
operations or prospects.
 2 2 2
  20




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Risks Related to Possible Inability to Complete Project Developments and the Financing Required for
Construction and Subsequent Operation
 We are pursuing alternative energy projects, including the Rialto and Natchez Projects, that will
involve substantial expense and risk.
  The construction of commercial scale projects that utilize our technology will require several
years and substantial financing, and may not be successful.
  We may not be able to successfully negotiate and execute engineering, procurement and construction
contracts with construction and other vendors necessary for our development projects.
  The volatility in the price for certain commodities that we may purchase in the open market to use
as feedstock; the price for oil and natural gas used to create fuels that compete with our fuels;
and prices for electricity could adversely affect our ability to develop, build and operate
commercial scale synthetic fuels and power plants or our ability to license our technology.
    21




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Risks Related to the East Dubuque Plant
 The market for natural gas has been volatile. If prices for natural gas increase significantly, we
may not be able to economically operate the East Dubuque Plant.
  Lower prices for nitrogen fertilizers or downturns in market demands could reduce the revenues and
profitability of the East Dubuque Plants nitrogen fertilizer business.
  A reduction in demand for corn or other crops could reduce demand for the nitrogen fertilizer
produced by REMC.
  Weather conditions may materially impact the demand for REMC products.
  We are substantially dependent on our East Dubuque Plant, and any operational disruption at the
plant could result in a reduction of sales volumes and could cause us to incur substantial
expenditures.
   22




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The business of the East Dubuque Plant is highly seasonal.
  The nitrogen fertilizer industry is very competitive and the actions of our competitors could
materially affect the business, results of operations and financial position of the Company.
  We rely on Agrium as distributor of the nitrogen fertilizer products we produce at the East
Dubuque Plant.
  We could be subject to claims and liabilities under environmental, health and safety laws and
regulations arising from the production and distribution of nitrogen fertilizers and alternative
energy products at our facilities.
  We may be required to install additional pollution control equipment at the East Dubuque Plant in
order to maintain compliance with applicable environmental requirements.
   23




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Risks Related to the Market for Rentech Common Stock
 We have a substantial overhang of common stock and future sales of our common stock will cause
substantial dilution and may negatively affect the market price of our shares.
    The market price of the Companys common stock may decline. A lower stock price would result in
more dilution if we issue shares to raise equity capital, and could prevent us from raising
sufficient equity capital to implement our business plan.
  
    
    the construction of a commercial scale synthetic fuels plant, including the Rialto and
Natchez Projects, or other plants is not completed in a timely, economical and efficient
manner;
 
    
    the construction of a commercial scale synthetic fuels plant, including the Rialto and
Natchez Projects or other plants, does not yield the expected benefits to our revenues and
profits as rapidly or to the extent that may be anticipated by financial or industry
analysts, shareholders or other investors;
 
    
    the effect of the construction of a commercial scale synthetic fuels plant, including the
Rialto and Natchez Projects or other plants, on our consolidated financial statements is not
consistent with the expectations of financial or industry analysts, shareholders or other
investors;
 
    
    our significant shareholders decide to dispose of their shares of common stock because of
any of the above or other reasons; or
 
    
    any of the other risks referred to in this section materialize.
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS
   24




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ITEM 2. PROPERTIES
 Rentech Energy Midwest Corporation Properties
  Product Demonstration Unit Properties
  Former Research and Development Property
  Natchez Project Property
  Office Leases
   
 ITEM 3. LEGAL PROCEEDINGS
   
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
   25




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PART II
 
 ITEM 5.
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
OF EQUITY SECURITIES
  Fiscal Year Ended September 30, 2009
    
    High
    
    
    LowFirst Quarter, ended December 31, 2008
    
    $
    1.31
    
    
    $
    0.46Second Quarter, ended March 31, 2009
    
    $
    0.88
    
    
    $
    0.53Third Quarter, ended June 30, 2009
    
    $
    0.73
    
    
    $
    0.51Fourth Quarter, ended September 30, 2009
    
    $
    2.40
    
    
    $
    0.46
 Fiscal Year Ended September 30, 2008
    
    High
    
    
    LowFirst Quarter, ended December 31, 2007
    
    $
    2.37
    
    
    $
    1.75Second Quarter, ended March 31, 2008
    
    $
    1.72
    
    
    $
    0.83Third Quarter, ended June 30, 2008
    
    $
    2.41
    
    
    $
    0.90Fourth Quarter, ended September 30, 2008
    
    $
    2.43
    
    
    $
    1.25
   Company Purchases of Equity Securities
  Recent Sales of Unregistered Securities
  STOCK PERFORMANCE GRAPH
    26




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9/04
    
    
    9/05
    
    
    9/06
    
    
    9/07
    
    
    9/08
    
    
    9/09Rentech, Inc.
    
    
    100.00
    
    
    
    281.11
    
    
    
    514.44
    
    
    
    240.00
    
    
    
    147.78
    
    
    
    180.00NYSE Amex Composite
    
    
    100.00
    
    
    
    146.79
    
    
    
    163.07
    
    
    
    206.80
    
    
    
    161.04
    
    
    
    169.27Peer Group
    
    
    100.00
    
    
    
    163.49
    
    
    
    108.23
    
    
    
    73.17
    
    
    
    35.64
    
    
    
    14.21
  27




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ITEM 6. SELECTED FINANCIAL DATA
  Years Ended September 30,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(Restated)(in thousands, except per share data)CONSOLIDATED STATEMENT OF OPERATIONS DATARevenues
    
    $
    183,000
    
    
    $
    210,971
    
    
    $
    132,320
    
    
    $
    44,517
    
    
    $
    589Cost of Sales
    
    $
    122,204
    
    
    $
    154,420
    
    
    $
    116,567
    
    
    $
    44,077
    
    
    $
    617Gross Profit (Loss)
    
    $
    60,796
    
    
    $
    56,551
    
    
    $
    15,753
    
    
    $
    440
    
    
    $
    (28
    )Research and Development Expense
    
    $
    21,381
    
    
    $
    64,477
    
    
    $
    43,127
    
    
    $
    12,054
    
    
    $
    496Income (Loss) from Continuing Operations
    
    $
    2,956
    
    
    $
    (56,973
    )
    
    $
    (94,867
    )
    
    $
    (39,912
    )
    
    $
    (15,615
    )Income from Discontinued Operations
    
    $
    72
    
    
    $
    91
    
    
    $
    3,150
    
    
    $
    1,265
    
    
    $
    1,256Net Income (Loss)
    
    $
    3,028
    
    
    $
    (56,882
    )
    
    $
    (91,717
    )
    
    $
    (38,647
    )
    
    $
    (14,359
    )Dividends
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (75
    )
    
    $
    (9,341
    )Net Income (Loss) Applicable to Common Stockholders
    
    $
    3,028
    
    
    $
    (56,882
    )
    
    $
    (91,717
    )
    
    $
    (38,722
    )
    
    $
    (23,700
    )Net Income (Loss) per Common Share:Basic:Continuing Operations (1)
    
    $
    0.02
    
    
    $
    (0.34
    )
    
    $
    (0.63
    )
    
    $
    (0.31
    )
    
    $
    (0.27
    )Discontinued Operations
    
    
    0.00
    
    
    
    0.00
    
    
    
    0.02
    
    
    
    0.01
    
    
    
    0.01Net Income (Loss)
    
    $
    0.02
    
    
    $
    (0.34
    )
    
    $
    (0.61
    )
    
    $
    (0.30
    )
    
    $
    (0.26
    )Diluted:Continuing Operations (1)
    
    $
    0.02
    
    
    $
    (0.34
    )
    
    $
    (0.63
    )
    
    $
    (0.31
    )
    
    $
    (0.27
    )Discontinued Operations
    
    
    0.00
    
    
    
    0.00
    
    
    
    0.02
    
    
    
    0.01
    
    
    
    0.01Net Income (Loss)
    
    $
    0.02
    
    
    $
    (0.34
    )
    
    $
    (0.61
    )
    
    $
    (0.30
    )
    
    $
    (0.26
    )Weighted-average shares used to compute net income
(loss) per common share:Basic
    
    
    174,445
    
    
    
    165,480
    
    
    
    151,356
    
    
    
    127,174
    
    
    
    92,919Diluted
    
    
    175,578
    
    
    
    165,480
    
    
    
    151,356
    
    
    
    127,174
    
    
    
    92,919CONSOLIDATED BALANCE SHEET DATAWorking Capital
    
    $
    10,591
    
    
    $
    21,484
    
    
    $
    37,960
    
    
    $
    65,316
    
    
    $
    32,031Construction in Progress
    
    $
    27,328
    
    
    $
    19,548
    
    
    $
    4,192
    
    
    $
    3,916
    
    
    $
    Total Assets
    
    $
    200,900
    
    
    $
    204,745
    
    
    $
    158,541
    
    
    $
    150,686
    
    
    $
    43,492Total Long-Term Liabilities
    
    $
    66,096
    
    
    $
    118,787
    
    
    $
    65,728
    
    
    $
    58,135
    
    
    $
    2,850Total Stockholders Equity (Deficit)
    
    $
    49,199
    
    
    $
    (7,084
    )
    
    $
    42,712
    
    
    $
    76,585
    
    
    $
    34,271
 
 (1)
    
    Includes dividends.  28




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ITEM 7.
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  RESTATEMENT
        29




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As Previously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedTotal cost of sales
    
    $
    160,425
    
    
    $
    (6,005
    )
    
    $
    154,420Gross profit
    
    
    50,546
    
    
    
    6,005
    
    
    
    56,551Write down of inventory to market
    
    
    8,650
    
    
    
    (8,650
    )
    
    
    0Loss from continuing operations before income taxes
    
    
    (62,965
    )
    
    
    6,005
    
    
    
    (56,960
    )Net loss
    
    
    (62,887
    )
    
    
    6,005
    
    
    
    (56,882
    )EPS  Basic
    
    
    (0.38
    )
    
    
    0.04
    
    
    
    (0.34
    )EPS  Diluted
    
    
    (0.38
    )
    
    
    0.04
    
    
    
    (0.34
    )
 As Previously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedInventories
    
    $
    29,491
    
    
    $
    (12,362
    )
    
    $
    17,129Deposits on gas contracts
    
    
    
    
    
    
    18,368
    
    
    
    18,368Accumulated deficit
    
    
    (255,260
    )
    
    
    6,005
    
    
    
    (249,255
    )Total stockholders deficit
    
    
    (13,089
    )
    
    
    6,005
    
    
    
    (7,084
    )
    Year Ended September 30, 2009First Quarter
    
    
    Second Quarter
    
    
    Third QuarterDecember 31, 2008
    
    
    March 31, 2009
    
    
    June 30, 2009As
    
    
    
    
    
    
    
    
    
    
    As
    
    
    
    
    
    
    
    
    
    
    AsPreviously
    
    
    Restatement
    
    
    As
    
    
    Previously
    
    
    Restatement
    
    
    As
    
    
    Previously
    
    
    Restatement
    
    
    AsReported
    
    
    Adjustments
    
    
    Restated
    
    
    Reported
    
    
    Adjustment
    
    
    Restated
    
    
    Reported
    
    
    Adjustment
    
    
    RestatedTotal cost of sales
    
    $
    40,416
    
    
    $
    (4,061
    )
    
    $
    36,355
    
    
    $
    19,793
    
    
    $
    8,131
    
    
    $
    27,924
    
    
    $
    38,850
    
    
    $
    1,819
    
    
    $
    40,669Gross profit (loss)
    
    
    9,661
    
    
    
    4,061
    
    
    
    13,722
    
    
    
    (3,004
    )
    
    
    (8,131
    )
    
    
    (11,135
    )
    
    
    52,567
    
    
    
    (1,819
    )
    
    
    50,748Write down of inventory to market
    
    
    10,115
    
    
    
    (10,115
    )
    
    
    0
    
    
    
    5,861
    
    
    
    (5,861
    )
    
    
    0
    
    
    
    116
    
    
    
    (116
    )
    
    
    0Income
(loss) from continuing operations before income taxes
    
    
    (4,320
    )
    
    
    4,061
    
    
    
    (259
    )
    
    
    (16,592
    )
    
    
    (8,131
    )
    
    
    (24,723
    )
    
    
    36,133
    
    
    
    (1,819
    )
    
    
    34,314Net income (loss)
    
    
    (4,323
    )
    
    
    4,061
    
    
    
    (262
    )
    
    
    (16,539
    )
    
    
    (8,131
    )
    
    
    (24,670
    )
    
    
    36,132
    
    
    
    (1,819
    )
    
    
    34,313EPS  Basic
    
    
    (0.03
    )
    
    
    0.03
    
    
    
    0.00
    
    
    
    (0.10
    )
    
    
    (0.05
    )
    
    
    (0.15
    )
    
    
    0.22
    
    
    
    (0.01
    )
    
    
    0.21EPS  Diluted
    
    
    (0.03
    )
    
    
    0.03
    
    
    
    0.00
    
    
    
    (0.10
    )
    
    
    (0.05
    )
    
    
    (0.15
    )
    
    
    0.22
    
    
    
    (0.02
    )
    
    
    0.20
  30




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##### Table of Contents



Year Ended September 30, 2008First Quarter
    
    
    Second Quarter
    
    
    Third QuarterDecember 31, 2007
    
    
    March 31, 2008
    
    
    June 30, 2008As
    
    
    
    
    
    
    
    
    
    
    As
    
    
    
    
    
    
    
    
    
    
    AsPreviously
    
    
    Restatement
    
    
    As
    
    
    Previously
    
    
    Restatement
    
    
    As
    
    
    Previously
    
    
    Restatement
    
    
    AsReported
    
    
    Adjustments
    
    
    Restated
    
    
    Reported
    
    
    Adjustments
    
    
    Restated
    
    
    Reported
    
    
    Adjustments
    
    
    RestatedTotal cost of sales
    
    $
    37,182
    
    
    $
    (82
    )
    
    $
    37,100
    
    
    $
    20,616
    
    
    $
    82
    
    
    $
    20,698
    
    
    $
    42,807
    
    
    $
    0
    
    
    $
    42,807Gross profit
    
    
    10,278
    
    
    
    82
    
    
    
    10,360
    
    
    
    7,917
    
    
    
    (82
    )
    
    
    7,835
    
    
    
    17,567
    
    
    
    0
    
    
    
    17,567Write down of inventory to market
    
    
    82
    
    
    
    (82
    )
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Loss from continuing operations before income taxes
    
    
    (23,437
    )
    
    
    82
    
    
    
    (23,355
    )
    
    
    (22,812
    )
    
    
    (82
    )
    
    
    (22,894
    )
    
    
    (7,788
    )
    
    
    0
    
    
    
    (7,788
    )Net loss
    
    
    (23,414
    )
    
    
    82
    
    
    
    (23,332
    )
    
    
    (22,796
    )
    
    
    (82
    )
    
    
    (22,878
    )
    
    
    (7,772
    )
    
    
    0
    
    
    
    (7,772
    )EPS  Basic
    
    
    (0.14
    )
    
    
    0
    
    
    
    (0.14
    )
    
    
    (0.14
    )
    
    
    0
    
    
    
    (0.14
    )
    
    
    (0.05
    )
    
    
    0
    
    
    
    (0.05
    )EPS  Diluted
    
    
    (0.14
    )
    
    
    0
    
    
    
    (0.14
    )
    
    
    (0.14
    )
    
    
    0
    
    
    
    (0.14
    )
    
    
    (0.05
    )
    
    
    0
    
    
    
    (0.05
    )
 Year Ended September 30, 2008Fourth QuarterSeptember 30, 2008As Previously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedTotal cost of sales
    
    $
    59,820
    
    
    $
    (6,005
    )
    
    $
    53,815Gross profit
    
    
    14,784
    
    
    
    6,005
    
    
    
    20,789Write down of
inventory to market
    
    
    8,568
    
    
    
    (8,568
    )
    
    
    0Loss from
continuing
operations before
income taxes
    
    
    (8,928
    )
    
    
    6,005
    
    
    
    (2,923
    )Net loss
    
    
    (8,905
    )
    
    
    6,005
    
    
    
    (2,900
    )EPS  Basic
    
    
    (0.05
    )
    
    
    0.04
    
    
    
    (0.01
    )EPS  Diluted
    
    
    (0.05
    )
    
    
    0.04
    
    
    
    (0.01
    )
   31




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##### Table of Contents



OVERVIEW OF OUR FINANCIAL CONDITION, LIQUIDITY, AND RESULTS OF OPERATIONS
    CRITICAL ACCOUNTING POLICIES AND ESTIMATES
   Revenue Recognition
   32




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##### Table of Contents



Inventories
 Valuation of Financial Instruments, Long-Lived Assets and Intangible Assets.
 Stock Based Compensation
 Deferred Income Taxes
 Business Segments
   33




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FISCAL YEAR 2009 COMPARED TO FISCAL YEAR 2008
 Continuing Operations:
 Revenues
 For the Years EndedSeptember 30,2009
    
    
    2008(in thousands)Revenues:Product shipments
    
    $
    180,384
    
    
    $
    206,615Natural gas sales of excess inventory
    
    
    2,378
    
    
    
    3,678Total nitrogen products manufacturing
    
    $
    182,762
    
    
    $
    210,293Alternative energy
    
    
    238
    
    
    
    678Total revenues
    
    $
    183,000
    
    
    $
    210,971
 For the Year
    
    
    For the YearEnded September 30, 2009
    
    
    Ended September 30, 2008Tons
    
    
    Revenue
    
    
    Tons
    
    
    Revenue(in thousands)
    
    
    (in thousands)Product Shipments:Ammonia
    
    
    126
    
    
    $
    90,419
    
    
    
    173
    
    
    $
    90,743Urea Ammonium Nitrate
    
    
    267
    
    
    
    68,893
    
    
    
    313
    
    
    
    93,179Urea (liquid and granular)
    
    
    36
    
    
    
    15,555
    
    
    
    34
    
    
    
    15,778Carbon Dioxide
    
    
    95
    
    
    
    2,571
    
    
    
    109
    
    
    
    2,860Nitric Acid
    
    
    9
    
    
    
    2,946
    
    
    
    14
    
    
    
    4,055Total
    
    
    533
    
    
    $
    180,384
    
    
    
    643
    
    
    $
    206,615
 Nitrogen products manufacturing.
   Alternative Energy.
  34




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##### Table of Contents



Cost of Sales
 For the Years EndedSeptember 30,2009
    
    
    2008(in thousands)Cost of sales:Product shipments
    
    $
    95,430
    
    
    $
    147,540Natural gas sales of excess inventory
    
    
    3,996
    
    
    
    3,731Natural gas sales with simultaneous purchase
    
    
    22,775
    
    
    
    3,040Total nitrogen products manufacturing
    
    
    122,201
    
    
    
    154,311Alternative energy
    
    
    3
    
    
    
    109Total cost of sales
    
    $
    122,204
    
    
    $
    154,420
 For the Year Ended(in thousands)
    
    September 30, 2008Total cost of sales (as previously reported)
    
    $
    160,425Restatement adjustments
    
    
    (6,005
    )Total cost of sales (as restated)
    
    $
    154,420
 Nitrogen Products Manufacturing
   Alternative Energy.
 Gross Profit
 For the Years EndedSeptember 30,2009
    
    
    2008(in thousands)Gross profit (loss):Product shipments
    
    $
    84,954
    
    
    $
    59,075Natural gas sales of excess inventory
    
    
    (1,618
    )
    
    
    (53
    )Natural gas sales with simultaneous purchase
    
    
    (22,775
    )
    
    
    (3,040
    )Total nitrogen products manufacturing
    
    
    60,561
    
    
    
    55,982Alternative energy
    
    
    235
    
    
    
    569Total gross profit
    
    $
    60,796
    
    
    $
    56,551
 For the Year Ended(in thousands)
    
    September 30, 2008Total gross profit (as previously reported)
    
    $
    50,546Restatement adjustments
    
    
    6,005Total gross profit (as restated)
    
    $
    56,551
 Nitrogen Products Manufacturing.
  35




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Alternative Energy
 Operating Expenses
 For the Years EndedSeptember 30,2009
    
    
    2008(in thousands)Operating expenses:Selling, general and administrative
    
    $
    24,061
    
    
    $
    33,352Depreciation and amortization
    
    
    1,478
    
    
    
    1,184Research and development
    
    
    21,381
    
    
    
    64,477Loss on impairment
    
    
    
    
    
    
    9,482Recovery of payment to vendor
    
    
    
    
    
    
    (1,473
    )Total operating expenses
    
    $
    46,920
    
    
    $
    107,022
 Selling, General and Administrative Expenses.
 Depreciation and Amortization
 Research and Development
 Loss on Impairment
 Recovery of Payment to Vendor
  36




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##### Table of Contents



Operating Income (Loss)
 For the Years EndedSeptember 30,2009
    
    
    2008(in thousands)Operating income (loss):Product shipments
    
    $
    81,441
    
    
    $
    55,829Natural gas sales of excess inventory
    
    
    (1,618
    )
    
    
    (53
    )Natural gas sales with simultaneous purchase
    
    
    (22,775
    )
    
    
    (3,040
    )Total nitrogen products manufacturing
    
    
    57,048
    
    
    
    52,736Alternative energy
    
    
    (43,172
    )
    
    
    (103,207
    )Total operating income (loss)
    
    $
    13,876
    
    
    $
    (50,471
    )
 For the Year Ended(in thousands)
    
    September 30, 2008Total operating loss (as previously reported)
    
    $
    (56,476
    )Restatement adjustments
    
    
    6,005Total operating loss (as restated)
    
    $
    (50,471
    )
 Nitrogen Products Manufacturing.
 Alternative Energy.
 Other Income (Expense)
 For the Years EndedSeptember 30,2009
    
    
    2008(in thousands)Other income (expense):Interest and dividend income
    
    $
    561
    
    
    $
    1,849Interest expense
    
    
    (11,050
    )
    
    
    (5,442
    )Loss on investments
    
    
    
    
    
    
    (3,011
    )Other income (expense)
    
    
    (370
    )
    
    
    115Total other expense
    
    $
    (10,859
    )
    
    $
    (6,489
    )
 Interest Income.
 Interest Expense.
 Loss on Investments
 Other Income (Expense).
  37




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##### Table of Contents



FISCAL YEAR 2008 COMPARED TO FISCAL YEAR 2007
 Continuing Operations:
 Revenues
 For the Years EndedSeptember 30,2008
    
    
    2007(in thousands)Revenues:Product shipments
    
    $
    206,615
    
    
    $
    124,498Natural gas sales of excess inventory
    
    
    3,678
    
    
    
    7,318Total nitrogen products manufacturing
    
    $
    210,293
    
    
    $
    131,816Alternative energy
    
    
    678
    
    
    
    504Total revenues
    
    $
    210,971
    
    
    $
    132,320
 For the Year
    
    
    For the YearEnded September 30, 2008
    
    
    Ended September 30, 2007Tons
    
    
    Revenue
    
    
    Tons
    
    
    Revenue(in thousands)
    
    
    (in thousands)Product Shipments:Ammonia
    
    
    173
    
    
    $
    90,743
    
    
    
    145
    
    
    $
    50,013Urea Ammonium Nitrate
    
    
    313
    
    
    
    93,179
    
    
    
    275
    
    
    
    56,317Urea (liquid and granular)
    
    
    34
    
    
    
    15,778
    
    
    
    32
    
    
    
    12,141Carbon Dioxide
    
    
    109
    
    
    
    2,860
    
    
    
    103
    
    
    
    2,650Nitric Acid
    
    
    14
    
    
    
    4,055
    
    
    
    16
    
    
    
    3,377Total
    
    
    643
    
    
    $
    206,615
    
    
    
    571
    
    
    $
    124,498
 Nitrogen products manufacturing.
  Alternative Energy.
 Cost of Sales
 For the Years EndedSeptember 30,2008
    
    
    2007(in thousands)Cost of sales:Product shipments
    
    $
    147,540
    
    
    $
    107,596Natural gas sales of excess inventory
    
    
    3,731
    
    
    
    7,666Natural gas sales with simultaneous purchase
    
    
    3,040
    
    
    
    Write down of inventory to market
    
    
    
    
    
    
    644Total nitrogen products manufacturing
    
    
    154,311
    
    
    
    115,906Alternative energy
    
    
    109
    
    
    
    661Total cost of sales
    
    $
    154,420
    
    
    $
    116,567
 Nitrogen Products Manufacturing
  38




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##### Table of Contents



Alternative Energy.
 Gross Profit
 For the Years EndedSeptember 30,2008
    
    
    2007(in thousands)Gross profit (loss):Product shipments
    
    $
    59,075
    
    
    $
    16,902Natural gas sales of excess inventory
    
    
    (53
    )
    
    
    (348
    )Natural gas sales with simultaneous purchase
    
    
    (3,040
    )
    
    
    Write down of inventory to market
    
    
    
    
    
    
    (644
    )Total nitrogen products manufacturing
    
    
    55,982
    
    
    
    15,910Alternative energy
    
    
    569
    
    
    
    (157
    )Total gross profit
    
    $
    56,551
    
    
    $
    15,753
 Nitrogen Products Manufacturing.
 Alternative Energy.
 Operating Expenses
 For the Years EndedSeptember 30,2008
    
    
    2007(in thousands)Operating expenses:Selling, general and administrative
    
    $
    33,352
    
    
    $
    28,093Depreciation and amortization
    
    
    1,184
    
    
    
    799Research and development
    
    
    64,477
    
    
    
    43,127Loss on impairment
    
    
    9,482
    
    
    
    38,197Recovery of payment to vendor
    
    
    (1,473
    )
    
    
    Total operating expenses
    
    $
    107,022
    
    
    $
    110,216
  39




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##### Table of Contents



Selling, General and Administrative Expenses.
 
    
    Salaries and benefits increased by $3,904,000. The increase was a result of hiring new
employees primarily related to the construction and operation of the PDU and operations at
REMC.
 
    
    Professional fees including legal services and accounting fees for audit and tax services
increased by $957,000. Significant components of the increase included preparation of tax
returns, analysis and guidance for disclosures regarding income taxes, legal fees for
development of the Natchez Project, and costs for continued development of the Companys
intellectual property portfolio.
 
    
    During fiscal 2008, we charged $571,000 to bad debt expense as a result of uncertainties
on the collectibility of billings under a technical services agreement.
 
    
    Consulting costs increased by $481,000 due primarily to non-cash expenses associated with
changes in terms to previously granted warrants.
 
    
    Non-cash marketing expenses increased by $380,000 due to expenses associated with
equity-based compensation to a vendor that provided marketing services.
 
    
    Information technology expense decreased by $874,000 as the Company completed efforts
that enhanced its data and communication infrastructure.
 Depreciation and Amortization
 Research and Development.
 Loss on Impairment and Recovery of Payment to Vendor
 Operating Income (Loss)
 For the Years EndedSeptember 30,2008
    
    
    2007(in thousands)Operating income (loss):Product shipments
    
    $
    55,829
    
    
    $
    14,214Natural gas sales of excess inventory
    
    
    (53
    )
    
    
    (348
    )Natural gas sales with simultaneous purchase
    
    
    (3,040
    )
    
    
    Write down of inventory to market
    
    
    
    
    
    
    (644
    )Total nitrogen products manufacturing
    
    
    52,736
    
    
    
    13,222Alternative energy
    
    
    (103,207
    )
    
    
    (107,685
    )Total operating income (loss)
    
    $
    (50,471
    )
    
    $
    (94,463
    )
  40




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##### Table of Contents



Nitrogen Products Manufacturing.
 Alternative Energy.
 Other Income (Expense)
 For the Years EndedSeptember 30,2008
    
    
    2007(in thousands)Other income (expense):Interest and dividend income
    
    $
    1,849
    
    
    $
    2,800Interest expense
    
    
    (5,442
    )
    
    
    (2,430
    )Loss on investments
    
    
    (3,011
    )
    
    
    Loss on disposal of fixed assets
    
    
    (5
    )
    
    
    (826
    )Other income
    
    
    120
    
    
    
    52Total other expense
    
    $
    (6,489
    )
    
    $
    (404
    )
 Interest and Dividend Income.
 Interest Expense.
 Loss on Investments
 Loss on Disposal of Fixed Assets.
 Discontinued Operations:
 Revenues and Net Income from Discontinued Operations
 For the Years EndedSeptember 30,2008
    
    
    2007(in thousands)(Net of tax)Revenues
    
    $
    
    
    
    $
    1,179Cost of sales
    
    
    
    
    
    
    762Gross profit
    
    $
    
    
    
    $
    417Operating expenses
    
    
    
    
    
    
    192Net income from discontinued operations
    
    $
    
    
    
    $
    225Gain on sale of discontinued operations
    
    
    91
    
    
    
    2,925$
    91
    
    
    $
    3,150
  41




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##### Table of Contents



Gain on Sale of Discontinued Operations
 For the Years EndedSeptember 30,2008
    
    
    2007(in thousands)(Net of tax)Gain on sale of PML
    
    $
    
    
    
    $
    2,721Earn-out on sale of REN
    
    
    91
    
    
    
    129Reversal of accrued liability for OKON
    
    
    
    
    
    
    75Total gain on sale of discontinued operations
    
    $
    91
    
    
    $
    2,925
 Gain on sale of discontinued operations.
 Sales price
    
    $
    5,398Less transaction costs
    
    
    (49
    )Net sales price to Rentech, after transaction costs
    
    $
    5,349Book value of Rentechs ownership in PML
    
    
    2,628Rentechs gain on sale of PML
    
    $
    2,721
 Earn-out on Sale of REN.
 INFLATION
   42




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##### Table of Contents



ANALYSIS OF CASH FLOWS
  For the Years EndedSeptember 30,2009
    
    
    2008(in thousands)Net Cash Provided by (Used in):Operating activities
    
    $
    4,072
    
    
    $
    (8,144
    )Investing activities
    
    
    (20,015
    )
    
    
    (16,883
    )Financing activities
    
    
    21,338
    
    
    
    55,057Net Increase in Cash
    
    $
    5,395
    
    
    $
    30,030
 Cash Flows From Operating Activities
 Net Income.
 Impairment of Assets.
 Recovery of Payment to Vendor.
 Bad Debt Expense.
 Non-Cash Interest Expense.
 Loss on Investments.
 Accounts Receivable.
 Property Insurance Claim Receivable.
 Inventories.
 Deferred Revenue.
  43




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##### Table of Contents



Cash Flows From Investing Activities
 Proceeds from Sales of Available for Sale Securities.
 Purchase of Construction in Progress, Net of Assets Placed in Service.
 Cash Flows From Financing Activities
 Payments of and Proceeds from Debt.
 Proceeds from the Issuance of Common Stock.
  44




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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
 Sources of Liquidity
     Liquidity Requirements
 Short-Term Liquidity Requirements
   
    
    Minimum EBITDA requirements (EBITDA, as calculated under the Senior Credit
Agreement, is presented not as a measure of operating results, but rather as a
measure of REMCs ability to service debt. It should not be construed as an
alternative to either (i) income from operations or (ii) cash flows from operating
activities. EBITDA as presented is not an indicator of future EBITDA, which may
vary and could decrease to a level below the minimum requirements of the Senior
Credit Agreement).
  45




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##### Table of Contents




    
    REMC must maintain a minimum rolling twelve-month EBITDA as of the end of each
quarter, as defined in the agreement. The minimum EBITDA requirement at September 30,
2009 was $42.5 million and REMCs EBITDA, calculated in accordance with the Senior
Credit Agreement and shown below (in thousands), was $65.1 million.
 Consolidated net income
    
    $
    3,028Non-REMC net loss
    
    
    44,392Interest expense
    
    
    6,755Depreciation and amortization
    
    
    8,463Non-cash charges
    
    
    2,500REMC EBITDA
    
    $
    65,138
 
    
    For fiscal year 2010, the minimum EBITDA requirement will range from $46 million to
$60 million in the various measurement periods.
 
    
    REMC must maintain at least $7.5 million of cash on deposit or in permitted short
term investments, provided that in the months of February, March and April the
requirement is reduced to $5 million. REMC had $36.7 million of cash and cash
equivalents as of September 30, 2009.
 
    
    REMC cannot spend more than a maximum amount of capital expenditures in each fiscal
year. For fiscal year 2009, REMCs aggregate limit on capital expenditures was
approximately $24.0 million. For fiscal year 2009, REMC incurred $12.6 million of
capital expenditures. If REMCs capital expenditures are less than the maximum
amounts, in a fiscal year, then the unused amount will be carried over to subsequent
fiscal years.
   Long-Term
Liquidity Requirements
  46




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##### Table of Contents



CONTRACTUAL OBLIGATIONS
  Less than
    
    
    
    
    
    
    
    
    
    
    More thanContractual Obligations
    
    Total
    
    
    1 Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    5 Years(in thousands)Continuing OperationsLine of credit
    
    $
    4,532
    
    
    $
    4,532
    
    
    $
    
    
    
    $
    
    
    
    $
    Term loan debt (1)
    
    
    37,112
    
    
    
    37,112
    
    
    
    
    
    
    
    
    
    
    
    Mortgage debt
    
    
    931
    
    
    
    24
    
    
    
    54
    
    
    
    61
    
    
    
    792Long-term convertible debt (2)
    
    
    57,500
    
    
    
    
    
    
    
    
    
    
    
    57,500
    
    
    
    Interest payments on debt
    
    
    13,340
    
    
    
    5,776
    
    
    
    4,716
    
    
    
    2,409
    
    
    
    439Natural gas (3)
    
    
    6,615
    
    
    
    6,615
    
    
    
    
    
    
    
    
    
    
    
    Purchase obligations (4)
    
    
    8,423
    
    
    
    8,423
    
    
    
    
    
    
    
    
    
    
    
    Asbestos removal (5)
    
    
    237
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    237Operating leases
    
    
    1,458
    
    
    
    600
    
    
    
    421
    
    
    
    420
    
    
    
    17Total
    
    $
    130,148
    
    
    $
    63,082
    
    
    $
    5,191
    
    
    $
    60,390
    
    
    $
    1,485
 
 (1)
    
    The amount presented represents outstanding borrowings under the
Senior Credit Agreement. Borrowings under the Senior Credit Agreement
bear interest on a variable rate based upon either LIBOR or the
lenders alternative base rate, plus in each case an applicable
margin. Advances under our line of credit accrue interest at LIBOR
plus a margin of 1.50%.(2)
    
    We have issued $57,500,000 principal amount of Convertible Senior
Notes Due 2013. The Notes bear interest at the rate of 4.00% per year
on the principal amount of the Notes, payable in cash semi-annually in
arrears on April 15 and October 15 of each year. Holders may convert
their Notes into shares of our common stock (or cash or a combination
of cash and shares of common stock, if we so elect) at an initial
conversion rate of 249.2522 shares of our common stock per $1,000
principal amount of Notes (which represents a conversion price of
approximately $4.0120 per share of common stock), under the
circumstances described in the Notes.(3)
    
    As of September 30, 2009 we had entered into multiple natural gas
supply contracts for various delivery dates through December 31, 2009.
Subsequent to September 30, 2009, we entered into additional contracts
of approximately $14.8 million with delivery dates through March 31,
2010.(4)
    
    The amount presented represents certain open purchases orders with our
vendors. Not all of our open purchase orders are purchase obligations,
since some of the orders are not enforceable or legally binding on us
until the goods are received or the services are provided.(5)
    
    We have a legal obligation to handle and dispose of asbestos at our
East Dubuque Plant and Natchez Project in a special manner when
undergoing major or minor renovations or when their buildings are
demolished, even though the timing and method of settlement are
conditional on future events that may or may not be in their control.
As a result, we have developed an estimate for a conditional obligation for
this disposal. In addition, through our normal repair and maintenance program
we may encounter situations where we are required to remove asbestos in order
to complete other work. The Company applied the expected present value
technique to calculate the fair value of the asset retirement
obligation for each property and, accordingly, the asset and related
obligation for each property have been recorded. Since we own both
properties and currently have no plans to dispose of the properties,
the obligation is considered long-term and, therefore, considered more
than five years out.  47




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##### Table of Contents



OFF-BALANCE SHEET ARRANGEMENTS
  Recent Accounting Pronouncements From Financial Statement Disclosures
   48




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##### Table of Contents



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Investment Securities Market Risk
   Interest Rate Risk
 Commodity Price Risk.
 Alternative Energy.
  49




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##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 RENTECH, INC.
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageConsolidated Financial Statements:Reports of Independent Registered Public Accounting Firms
    
    
    51Consolidated Balance Sheets
    
    
    55Consolidated Statements of Operations
    
    
    56Consolidated Statements of Stockholders Equity (Deficit)
    
    
    57Consolidated Statements of Cash Flows
    
    
    58Notes to Consolidated Financial Statements
    
    
    60Financial Statement Schedule:Schedule II  Valuation and Qualifying Accounts for the
years ended September 30, 2009, 2008 and 2007
    
    
    94
  50




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
  Internal Control  Integrated
Framework
    
  51




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     Internal ControlIntegrated Framework
  
  52




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 Internal Control 
Integrated Framework
       53




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##### Table of Contents



Internal Control  Integrated Framework
   
  54




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##### Table of Contents



RENTECH, INC.
 
 Consolidated Balance Sheets
 (Amounts in thousands, except per share data)
 As of September 30,2009
    
    
    2008(Restated)ASSETSCurrent assetsCash and cash equivalents
    
    $
    69,117
    
    
    $
    63,722Restricted cash, short-term
    
    
    150
    
    
    
    152Accounts receivable, net of allowance for doubtful
accounts of $0 and $692 at September 30, 2009 and
2008, respectively
    
    
    9,757
    
    
    
    12,713Inventories
    
    
    12,222
    
    
    
    17,129Deposits on gas contracts
    
    
    724
    
    
    
    18,368Prepaid expenses and other current assets
    
    
    2,417
    
    
    
    2,399Other receivables, net
    
    
    1,809
    
    
    
    43Total current assets
    
    
    96,196
    
    
    
    114,526Property, plant and equipment, net
    
    
    54,249
    
    
    
    56,312Construction in progress
    
    
    27,328
    
    
    
    19,548Other assetsOther assets and deposits
    
    
    17,127
    
    
    
    8,309Available for sale securities, non-current
    
    
    6,000
    
    
    
    6,000Restricted cash, long-term
    
    
    
    
    
    
    50Total other assets
    
    
    23,127
    
    
    
    14,359Total assets
    
    $
    200,900
    
    
    $
    204,745LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)Current liabilitiesAccounts payable
    
    $
    5,495
    
    
    $
    8,256Accrued payroll and benefits
    
    
    6,204
    
    
    
    5,306Accrued liabilities
    
    
    11,801
    
    
    
    10,057Line of credit on available for sale securities
    
    
    4,532
    
    
    
    4,758Deferred revenue
    
    
    18,203
    
    
    
    62,808Accrued interest
    
    
    2,930
    
    
    
    1,834Current portion of long-term debt and term loan
    
    
    36,440
    
    
    
    23Total current liabilities
    
    
    85,605
    
    
    
    93,042Long-term liabilitiesLong-term debt, net of current portion
    
    
    907
    
    
    
    930Term loan, long-term
    
    
    
    
    
    
    53,000Long-term convertible debt to stockholders
    
    
    57,054
    
    
    
    56,929Advance for equity investment
    
    
    7,892
    
    
    
    7,892Other long-term liabilities
    
    
    243
    
    
    
    36Total long-term liabilities
    
    
    66,096
    
    
    
    118,787Total liabilities
    
    
    151,701
    
    
    
    211,829Commitments and contingencies(Note 14)Stockholders equity (deficit)Preferred stock  $10 par value; 1,000 shares
authorized; 90 series A convertible preferred
shares authorized and issued; no shares outstanding
and $0 liquidation preference
    
    
    
    
    
    
    Series C participating cumulative preferred stock 
$10 par value; 500 shares authorized; no shares
issued and outstanding
    
    
    
    
    
    
    Common stock  $.01 par value; 350,000 shares
authorized; 212,696 and 166,688 shares issued and
outstanding at September 30, 2009 and 2008,
respectively
    
    
    2,127
    
    
    
    1,667Additional paid-in capital
    
    
    293,299
    
    
    
    241,110Note receivable on sale of common stock
    
    
    
    
    
    
    (606
    )Accumulated deficit
    
    
    (246,227
    )
    
    
    (249,255
    )Total stockholders equity (deficit)
    
    
    49,199
    
    
    
    (7,084
    )Total liabilities and stockholders equity (deficit)
    
    $
    200,900
    
    
    $
    204,745
   55




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##### Table of Contents



RENTECH, INC.
 
 Consolidated Statements of Operations
 (Amounts in thousands, except per share data)
 For the Years Ended September 30,2009
    
    
    2008
    
    
    2007(Restated)RevenuesProduct sales
    
    $
    182,762
    
    
    $
    210,293
    
    
    $
    131,816Service revenues
    
    
    238
    
    
    
    678
    
    
    
    504Total revenues
    
    
    183,000
    
    
    
    210,971
    
    
    
    132,320Cost of salesProduct sales
    
    
    122,201
    
    
    
    154,311
    
    
    
    115,262Write down of inventory to market
    
    
    
    
    
    
    
    
    
    
    644Service revenues
    
    
    3
    
    
    
    109
    
    
    
    661Total cost of sales
    
    
    122,204
    
    
    
    154,420
    
    
    
    116,567Gross profit
    
    
    60,796
    
    
    
    56,551
    
    
    
    15,753Operating expensesSelling, general and administrative expense
    
    
    24,061
    
    
    
    33,352
    
    
    
    28,093Depreciation and amortization
    
    
    1,478
    
    
    
    1,184
    
    
    
    799Research and development
    
    
    21,381
    
    
    
    64,477
    
    
    
    43,127Loss on impairment
    
    
    
    
    
    
    9,482
    
    
    
    38,197Recovery of payment to vendor
    
    
    
    
    
    
    (1,473
    )
    
    
    Total operating expenses
    
    
    46,920
    
    
    
    107,022
    
    
    
    110,216Operating income (loss)
    
    
    13,876
    
    
    
    (50,471
    )
    
    
    (94,463
    )Other income (expenses)Interest and dividend income
    
    
    561
    
    
    
    1,849
    
    
    
    2,800Interest expense
    
    
    (11,050
    )
    
    
    (5,442
    )
    
    
    (2,430
    )Loss on investments
    
    
    
    
    
    
    (3,011
    )
    
    
    Loss on disposal of assets
    
    
    (17
    )
    
    
    (5
    )
    
    
    (826
    )Other income (expense)
    
    
    (353
    )
    
    
    120
    
    
    
    52Total other income (expenses)
    
    
    (10,859
    )
    
    
    (6,489
    )
    
    
    (404
    )Income (loss) from continuing operations before income taxes
    
    
    3,017
    
    
    
    (56,960
    )
    
    
    (94,867
    )Income tax expense
    
    
    61
    
    
    
    13
    
    
    
    Income (loss) from continuing operations
    
    
    2,956
    
    
    
    (56,973
    )
    
    
    (94,867
    )Discontinued operations:Income from discontinued operations net of tax of $11 (2007)
    
    
    
    
    
    
    
    
    
    
    225Gain on sale of discontinued operations, net of tax of $0 (2009, 2008 and 2007)
    
    
    72
    
    
    
    91
    
    
    
    2,92572
    
    
    
    91
    
    
    
    3,150Net income (loss)
    
    $
    3,028
    
    
    $
    (56,882
    )
    
    $
    (91,717
    )Net income (loss) per common share:Basic:Continuing operations
    
    $
    0.02
    
    
    $
    (0.34
    )
    
    $
    (0.63
    )Discontinued operations
    
    
    0.00
    
    
    
    0.00
    
    
    
    0.02Net income (loss)
    
    $
    0.02
    
    
    $
    (0.34
    )
    
    $
    (0.61
    )Diluted:Continuing operations
    
    $
    0.02
    
    
    $
    (0.34
    )
    
    $
    (0.63
    )Discontinued operations
    
    
    0.00
    
    
    
    0.00
    
    
    
    0.02Net income (loss)
    
    $
    0.02
    
    
    $
    (0.34
    )
    
    $
    (0.61
    )Weighted-average shares used to compute net income (loss) per common share:Basic
    
    
    174,445
    
    
    
    165,480
    
    
    
    151,356Diluted
    
    
    175,578
    
    
    
    165,480
    
    
    
    151,356
   56




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##### Table of Contents



RENTECH, INC.
 
 Consolidated Statements of Stockholders Equity (Deficit)
 (Amounts in thousands)
 AccumulatedAdditional
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    TotalCommon Stock
    
    
    Paid-in
    
    
    Notes
    
    
    Accumulated
    
    
    Comprehensive
    
    
    StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Receivable
    
    
    Deficit
    
    
    Income (Loss)
    
    
    Equity (Deficit)Balance, September 30, 2006
    
    
    141,775
    
    
    $
    1,418
    
    
    $
    175,825
    
    
    $
    
    
    
    $
    (100,656
    )
    
    $
    (2
    )
    
    $
    76,585Common stock issued for cash net of offering costs of $3,202
    
    
    20,092
    
    
    
    201
    
    
    
    51,448
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,649Common stock issued for cash on options and warrants exercised
    
    
    1,526
    
    
    
    15
    
    
    
    1,892
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,907Stock based compensation issued for services
    
    
    
    
    
    
    
    
    
    
    1,834
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,834Restricted stock units issued for services
    
    
    
    
    
    
    
    
    
    
    3,132
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,132Restricted stock units settled in shares
    
    
    412
    
    
    
    4
    
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Restricted stock units surrendered for withholding taxes payable
    
    
    
    
    
    
    
    
    
    
    (680
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (680
    )Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (91,717
    )
    
    
    
    
    
    
    (91,717
    )Other comprehensive income:Unrealized gain on marketable securities, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    2Balance, September 30, 2007
    
    
    163,805
    
    
    $
    1,638
    
    
    $
    233,447
    
    
    $
    
    
    
    $
    (192,373
    )
    
    $
    
    
    
    $
    42,712Common stock issued for cash and notes receivable
    
    
    400
    
    
    
    4
    
    
    
    604
    
    
    
    (606
    )
    
    
    
    
    
    
    
    
    
    
    2Common stock issued for cash on options and warrants exercised
    
    
    1,377
    
    
    
    14
    
    
    
    1,597
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,611Common stock issued for conversion of note payable
    
    
    348
    
    
    
    3
    
    
    
    186
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    189Stock based compensation issued for services
    
    
    
    
    
    
    
    
    
    
    1,869
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,869Restricted stock units issued for services
    
    
    
    
    
    
    
    
    
    
    3,871
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,871Restricted stock units surrendered for withholding taxes payable
    
    
    
    
    
    
    
    
    
    
    (456
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (456
    )Restricted stock units settled in shares
    
    
    758
    
    
    
    8
    
    
    
    (8
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss (restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (56,882
    )
    
    
    
    
    
    
    (56,882
    )Balance, September 30, 2008 (restated)
    
    
    166,688
    
    
    $
    1,667
    
    
    $
    241,110
    
    
    $
    (606
    )
    
    $
    (249,255
    )
    
    $
    
    
    
    $
    (7,084
    )Common stock issued for cash net of offering costs of $1,583
    
    
    30,683
    
    
    
    307
    
    
    
    39,489
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,796Common stock issued for acquisition
    
    
    14,504
    
    
    
    145
    
    
    
    8,122
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,267Common stock issued to directors
    
    
    394
    
    
    
    4
    
    
    
    212
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    216Common stock issued for services
    
    
    25
    
    
    
    
    
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17Common stock issued for cash on options exercised
    
    
    95
    
    
    
    1
    
    
    
    132
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    133Warrants granted in connection with equity investment
    
    
    
    
    
    
    
    
    
    
    629
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    629Warrants granted in connection with amendment to term loan
    
    
    
    
    
    
    
    
    
    
    1,626
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,626Rescission of previously issued common stock and related notes receivable
    
    
    (400
    )
    
    
    (4
    )
    
    
    (604
    )
    
    
    606
    
    
    
    
    
    
    
    
    
    
    
    (2
    )Stock based compensation issued for services
    
    
    
    
    
    
    
    
    
    
    868
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    868Restricted stock units issued for services
    
    
    
    
    
    
    
    
    
    
    1,854
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,854Restricted stock units surrendered for withholding taxes payable
    
    
    
    
    
    
    
    
    
    
    (149
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (149
    )Restricted stock units settled in shares
    
    
    707
    
    
    
    7
    
    
    
    (7
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,028
    
    
    
    
    
    
    
    3,028Balance, September 30, 2009
    
    
    212,696
    
    
    $
    2,127
    
    
    $
    293,299
    
    
    $
    
    
    
    $
    (246,227
    )
    
    $
    
    
    
    $
    49,199
   57




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##### Table of Contents



RENTECH, INC.
 
 Consolidated Statements of Cash Flows
 (Amounts in thousands)
 For the Years Ended September 30,2009
    
    
    2008
    
    
    2007(Restated)Cash flows from operating activitiesNet income (loss)
    
    $
    3,028
    
    
    $
    (56,882
    )
    
    $
    (91,717
    )Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activitiesDepreciation and amortization
    
    
    9,758
    
    
    
    9,545
    
    
    
    8,519Impairment of assets
    
    
    
    
    
    
    9,482
    
    
    
    38,197Recovery of payment to vendor
    
    
    
    
    
    
    (1,473
    )
    
    
    Utilization of spare parts
    
    
    1,677
    
    
    
    1,000
    
    
    
    1,120Bad debt expense
    
    
    5
    
    
    
    571
    
    
    
    Loss on disposal of property, plant and equipment
    
    
    17
    
    
    
    5
    
    
    
    826Non-cash interest expense
    
    
    3,597
    
    
    
    1,348
    
    
    
    748(Reversal of) non-cash marketing expense
    
    
    (380
    )
    
    
    380
    
    
    
    Loss on investments
    
    
    
    
    
    
    3,011
    
    
    
    Write down of inventory to market
    
    
    
    
    
    
    
    
    
    
    644Stock-based compensation
    
    
    2,955
    
    
    
    5,740
    
    
    
    4,966Gain on sale of subsidiaries
    
    
    (72
    )
    
    
    (91
    )
    
    
    (2,793
    )Equity in loss of investee
    
    
    84
    
    
    
    
    
    
    
    Changes in operating assets and liabilitiesAccounts receivable
    
    
    2,951
    
    
    
    (1,594
    )
    
    
    (6,712
    )Property insurance claim receivable
    
    
    (1,795
    )
    
    
    
    
    
    
    Other receivables and receivable from related party
    
    
    29
    
    
    
    2,465
    
    
    
    (54
    )Inventories
    
    
    5,278
    
    
    
    (4,183
    )
    
    
    (2,699
    )Deposits on gas contracts
    
    
    17,644
    
    
    
    (17,673
    )
    
    
    649Prepaid expenses and other assets
    
    
    2,186
    
    
    
    3,686
    
    
    
    (1,440
    )Accounts payable
    
    
    (2,535
    )
    
    
    (4,016
    )
    
    
    6,580Accrued retirement payable
    
    
    
    
    
    
    (125
    )
    
    
    (531
    )Deferred revenue
    
    
    (44,605
    )
    
    
    40,349
    
    
    
    18,437Accrued interest
    
    
    1,096
    
    
    
    773
    
    
    
    8Accrued liabilities, accrued payroll and other
    
    
    3,154
    
    
    
    (462
    )
    
    
    9,571Net cash provided by (used in) operating activities
    
    
    4,072
    
    
    
    (8,144
    )
    
    
    (15,681
    )Cash flows from investing activitiesPurchases of available for sale securities
    
    
    
    
    
    
    (513
    )
    
    
    (36,486
    )Proceeds from sales of available for sale securities
    
    
    
    
    
    
    13,762
    
    
    
    44,512Purchase of property, plant and equipment
    
    
    (9,729
    )
    
    
    (7,684
    )
    
    
    (11,487
    )Purchase of construction in progress, net of assets placed in service
    
    
    (8,693
    )
    
    
    (23,305
    )
    
    
    (39,568
    )Proceeds from disposal of fixed assets
    
    
    983
    
    
    
    
    
    
    
    Payments for acquisition
    
    
    (949
    )
    
    
    
    
    
    
    Deposits and other assets
    
    
    (1,752
    )
    
    
    707
    
    
    
    (2,374
    )Proceeds from sale of subsidiary
    
    
    
    
    
    
    
    
    
    
    5,398Other items
    
    
    125
    
    
    
    150
    
    
    
    182Net cash used in investing activities
    
    
    (20,015
    )
    
    
    (16,883
    )
    
    
    (39,823
    )
   58




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RENTECH, INC.
Consolidated Statements of Cash Flows  Continued  (Amounts in thousands)
 For the Years Ended September 30,2009
    
    
    2008
    
    
    2007Cash flows from financing activitiesProceeds from term loan
    
    
    
    
    
    
    49,903
    
    
    
    Proceeds from line of credit on available for sale securities
    
    
    
    
    
    
    4,758
    
    
    
    Proceeds from issuance of common stock and warrants
    
    
    41,378
    
    
    
    2
    
    
    
    54,851Payments of offering costs
    
    
    (1,583
    )
    
    
    
    
    
    
    (3,202
    )Proceeds from options and warrants exercised
    
    
    133
    
    
    
    1,611
    
    
    
    1,907Payment of debt issuance costs
    
    
    
    
    
    
    (453
    )
    
    
    Payments on notes payable for financed insurance premiums
    
    
    
    
    
    
    (745
    )
    
    
    Proceeds from advance for equity investment, net
    
    
    
    
    
    
    
    
    
    
    7,892Proceeds from grant and interest earned on grant proceeds
    
    
    
    
    
    
    
    
    
    
    2,265Payments of financial advisory fees
    
    
    
    
    
    
    
    
    
    
    (1,044
    )Payments on line of credit
    
    
    (226
    )
    
    
    
    
    
    
    Payments on debt and notes payable
    
    
    (18,364
    )
    
    
    (19
    )
    
    
    (39
    )Net cash provided by financing activities
    
    
    21,338
    
    
    
    55,057
    
    
    
    62,630Increase in cash
    
    
    5,395
    
    
    
    30,030
    
    
    
    7,126Cash and cash equivalents, beginning of year
    
    
    63,722
    
    
    
    33,692
    
    
    
    26,566Cash and cash equivalents, end of year
    
    $
    69,117
    
    
    $
    63,722
    
    
    $
    33,692
  For the Years Ended September 30,2009
    
    
    2008
    
    
    2007Cash payments of interestFrom continuing operations, net of capitalized
interest of $1,862 (2009), $596 (2008) and $698
(2007)
    
    $
    8,088
    
    
    $
    3,894
    
    
    $
    1,660From discontinued operations
    
    
    
    
    
    
    
    
    
    
    2Total cash payments of interest
    
    $
    8,088
    
    
    $
    3,894
    
    
    $
    1,662Cash payments of income taxes from continuing operations
    
    $
    30
    
    
    $
    32
    
    
    $
    
  For the Years Ended September 30,2009
    
    
    2008
    
    
    2007Payment of loan fees through reduction of proceeds
    
    $
    
    
    
    $
    3,097
    
    
    $
    Purchase of insurance policies financed with notes payable
    
    
    2,204
    
    
    
    1,719
    
    
    
    Warrants granted in connection with amendment to term loan
    
    
    1,626
    
    
    
    
    
    
    
    Warrants granted in connection with equity investment
    
    
    629
    
    
    
    
    
    
    
    Rescission of notes receivable on repurchase of common stock
    
    
    606
    
    
    
    
    
    
    
    Issuance of common stock for notes receivable
    
    
    
    
    
    
    606
    
    
    
    Restricted stock units surrendered for withholding taxes payable
    
    
    149
    
    
    
    456
    
    
    
    680Acquisition, which includes issuance of common stock
    
    
    8,292
    
    
    
    
    
    
    
    Purchase of common stock warrants paid through the reduction of loan fees
    
    
    50
    
    
    
    
    
    
    
    Issuance of common stock for debt conversion
    
    
    
    
    
    
    189
    
    
    
    Inventory transfers under product exchange agreement, net
    
    
    
    
    
    
    
    
    
    
    2,427Receivable on disposal of fixed asset
    
    
    
    
    
    
    
    
    
    
    81Mark available for sale securities to market
    
    
    
    
    
    
    
    
    
    
    2
   59




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##### Table of Contents



RENTECH, INC.
 
 Notes to Consolidated Financial Statements
 Note 1  Description of Business
 Description of Business
   Principles of Consolidation
  Reclassifications and Presentation
  Subsequent Events
  Note 2  Restatement of Consolidated Financial Statements
     60




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##### Table of Contents



AsPreviously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedTotal cost of sales
    
    $
    160,425
    
    
    $
    (6,005
    )
    
    $
    154,420Gross profit
    
    
    50,546
    
    
    
    6,005
    
    
    
    56,551Write down of inventory to market
    
    
    8,650
    
    
    
    (8,650
    )
    
    
    0Loss from continuing operations before income taxes
    
    
    (62,965
    )
    
    
    6,005
    
    
    
    (56,960
    )Net loss
    
    
    (62,887
    )
    
    
    6,005
    
    
    
    (56,882
    )EPS  Basic
    
    
    (0.38
    )
    
    
    0.04
    
    
    
    (0.34
    )EPS  Diluted
    
    
    (0.38
    )
    
    
    0.04
    
    
    
    (0.34
    )
  AsPreviously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedInventories
    
    $
    29,491
    
    
    $
    (12,362
    )
    
    $
    17,129Deposits on gas contracts
    
    
    
    
    
    
    18,368
    
    
    
    18,368Accumulated deficit
    
    
    (255,260
    )
    
    
    6,005
    
    
    
    (249,255
    )Total stockholders deficit
    
    
    (13,089
    )
    
    
    6,005
    
    
    
    (7,084
    )
 Note 3  Summary of Certain Significant Accounting Policies
 Financial Accounting Standards Board Issues Accounting Standards Codification
   61




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##### Table of Contents



Use of Estimates
  Concentration of Business and Credit Risk
    Fair Value of Financial Instruments
     62




---



##### Table of Contents



Revenue Recognition
     Deferred Revenue
  Cost of Sales
  Natural Gas
  Inventories
    63




---



##### Table of Contents



Spare Parts
  Cash and Cash Equivalents
  Restricted Cash
  Available for Sale Securities
  Accounts Receivable
  Allowance for Doubtful Accounts
  Property, Plant and Equipment
  Type of Asset
    
    Estimated Useful LifeBuilding and building improvements
    
    15-40 yearsMachinery and equipment
    
    5-10 yearsFurniture, fixtures and office equipment
    
    7-10 yearsComputer equipment and software
    
    3-7 yearsVehicles
    
    3-5 yearsSpare parts
    
    Useful life of the spare parts or the related equipmentLeasehold improvements
    
    Useful life or remaining lease term whichever is shorterAmmonia catalyst
    
    3-10 yearsPlatinum catalyst
    
    Based on units of production
  64




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##### Table of Contents



Construction in Progress
   Impairment of Long-Lived Assets
  Software Capitalization
   Grants
  Licensed Technology and Technology Rights
    65




---



##### Table of Contents



Patents
  Leases
  Advertising Costs
  Research and Development Expenses
    Income Taxes
   Comprehensive Income (Loss)
  Net Income (Loss) Per Common Share
   66




---



##### Table of Contents



Recent Accounting Pronouncements
         67




---



##### Table of Contents



Note 4  Discontinued Operations
    68




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##### Table of Contents



Sales price
    
    $
    5,398Less transaction costs
    
    
    (49
    )Net sales price to Rentech, Inc., after transaction costs
    
    $
    5,349Book value of Rentechs ownership in PML
    
    
    2,628Rentechs gain on sale of PML
    
    $
    2,721
  For the Years Ended September 30,2009
    
    
    2008
    
    
    2007(in thousands)Revenue from discontinued operationsOKON
    
    $
    
    
    
    $
    
    
    
    $
    REN
    
    
    
    
    
    
    
    
    
    
    PML
    
    
    
    
    
    
    
    
    
    
    1,179Total revenue
    
    $
    
    
    
    $
    
    
    
    $
    1,179Net income from discontinued operationsOKON
    
    $
    
    
    
    $
    
    
    
    $
    REN
    
    
    
    
    
    
    
    
    
    
    PML
    
    
    
    
    
    
    
    
    
    
    225Total income from discontinued operations
    
    $
    
    
    
    $
    
    
    
    $
    225Gain on sale of subsidiariesOKON
    
    $
    
    
    
    $
    
    
    
    $
    75REN
    
    
    72
    
    
    
    91
    
    
    
    129PML
    
    
    
    
    
    
    
    
    
    
    2,721Total gain on sale of subsidiaries
    
    $
    72
    
    
    $
    91
    
    
    $
    2,925
  69




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##### Table of Contents



Note 5  Available for Sale Securities
       As of September 30, 2009Quoted Prices in
    
    
    Significant Other
    
    
    SignificantActive Markets for
    
    
    Observable
    
    
    UnobservableIdentical Assets
    
    
    Inputs
    
    
    InputsTotal Fair Value
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3(in thousands)Available for sale securities, non-current
    
    $
    6,000
    
    
    
    
    
    
    
    
    
    
    $
    6,000
    70




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##### Table of Contents



Note 6  Accounts Receivable
  As of September 30,2009
    
    
    2008(in thousands)Trade receivables from nitrogen products
    
    $
    8,717
    
    
    $
    12,528Trade receivables from alternative energy
    
    
    1,040
    
    
    
    877Total accounts receivable, gross
    
    
    9,757
    
    
    
    13,405Allowance for doubtful accounts on trade accounts receivable
    
    
    
    
    
    
    (692
    )Total accounts receivable, net
    
    $
    9,757
    
    
    $
    12,713
 Note 7  Inventories
  As of September 30,2009
    
    
    2008(in thousands)Finished goods
    
    $
    11,834
    
    
    $
    16,406Raw materials
    
    
    388
    
    
    
    723Total inventory
    
    $
    12,222
    
    
    $
    17,129
 Note 8  Property, Plant and Equipment
  As of September 30,2009
    
    
    2008(in thousands)Land
    
    $
    1,933
    
    
    $
    1,904Buildings and building improvements
    
    
    11,017
    
    
    
    10,902Machinery and equipment
    
    
    64,697
    
    
    
    59,263Furniture, fixtures and office equipment
    
    
    882
    
    
    
    862Computer equipment and computer software
    
    
    4,073
    
    
    
    3,528Vehicles
    
    
    172
    
    
    
    172Leasehold improvements
    
    
    441
    
    
    
    441Conditional asset (asbestos removal)
    
    
    210
    
    
    
    83,425
    
    
    
    77,072Less accumulated depreciation
    
    
    (29,176
    )
    
    
    (20,760
    )Total depreciable property, plant and equipment, net
    
    $
    54,249
    
    
    $
    56,312
  As of September 30,2009
    
    
    2008(in thousands)Construction in progress for projects under development
    
    $
    17,931
    
    
    $
    15,432Accumulated capitalized interest costs related to projects under development
    
    
    2,488
    
    
    
    626Construction in progress for machinery and equipment
    
    
    6,882
    
    
    
    3,490Conditional asset (asbestos removal)
    
    
    27
    
    
    
    Total construction in progress
    
    $
    27,328
    
    
    $
    19,548
   71




---



##### Table of Contents



Note 9  Investment in ClearFuels Technology Inc.
   Note 10  Acquisition of SilvaGas Holdings Corporation
   72




---



##### Table of Contents



Common stock
    
    $
    8,267Cash
    
    
    500Estimated direct acquisition costs
    
    
    449Total estimated purchase price
    
    $
    9,216
   Note 11  Debt
   73




---



##### Table of Contents



74




---



##### Table of Contents



As of September 30,2009
    
    
    2008(in thousands)Face value of term loan under the Senior Credit Agreement
    
    $
    37,112
    
    
    $
    53,000Less unamortized discount
    
    
    (696
    )
    
    
    (
    )Book value of term loan under the Senior Credit Agreement
    
    
    36,416
    
    
    
    53,000Less current portion
    
    
    (36,416
    )
    
    
    (
    )Term loan, long term portion
    
    $
    
    
    
    $
    53,000Mortgage dated February 8, 1999; monthly principal and
interest payments of $7 with interest at 6.5%; unpaid
principal and accrued interest due March 1, 2029;
collateralized by land and building
    
    $
    931
    
    
    $
    953Less current portion
    
    
    (24
    )
    
    
    (23
    )Mortgage debt, long term portion
    
    $
    907
    
    
    $
    930Total debt
    
    $
    37,347
    
    
    $
    53,953Less current portion
    
    
    (36,440
    )
    
    
    (23
    )Total debt, long term portion
    
    $
    907
    
    
    $
    53,930
  For the Years Ending September 30,2010
    
    $
    37,1362011
    
    
    262012
    
    
    282013
    
    
    302014
    
    
    31Thereafter
    
    
    792$
    38,043Less unamortized discount
    
    
    (696
    )$
    37,347
   75




---



##### Table of Contents



Note 12  Convertible Debt
      76




---



##### Table of Contents



As of September 30,2009
    
    
    2008(in thousands)Convertible senior notes
    
    $
    57,500
    
    
    $
    57,500Less Unamortized deferred financing charges
    
    
    (446
    )
    
    
    (571
    )Long-term convertible debt to stockholders
    
    $
    57,054
    
    
    $
    56,929Prepaid debt issuance costs on convertible senior notes
    
    $
    1,900
    
    
    $
    2,435
   Note 13  Advance for Equity Investment
    77




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##### Table of Contents



Note 14  Commitments and Contingencies
 Natural Gas Agreements
  As ofSeptember 30,
    
    
    September 30,2009
    
    
    2008(in thousands)MMBTUs under fixed priced contracts
    
    
    1,398
    
    
    
    3,036MMBTUs under index priced contracts
    
    
    
    
    
    
    Total MMBTUs under contracts
    
    
    1,398
    
    
    
    3,036Commitments to purchase natural gas
    
    $
    6,615
    
    
    $
    34,505Weighted average rate per MMBTU based on
the fixed rates and the indexes
applicable to each contract
    
    $
    4.73
    
    
    $
    11.37
  Operating Leases
      For the Years Ending September 30,2010
    
    $
    6002011
    
    
    2102012
    
    
    2112013
    
    
    2102014
    
    
    210Thereafter
    
    
    17$
    1,458
 Litigation
   78




---



##### Table of Contents



Note 15  Stockholders Equity
 Common Stock
          79




---



##### Table of Contents



Long-Term Incentive Equity Awards
  
    
    Under the absolute share price target award, zero to 100 percent of the performance stock
vests on April 1, 2011, with the final vesting amount depending on the Companys volume
weighted average stock price falling within a share price target range. The Companys share
price must be greater than $2.00 per share for any shares to vest, and the amount of shares
that vests increases pro-rata for a price greater than $2.00 up to a maximum vesting at
$4.00.
 
    
    Under the total shareholder return award, zero to 100 percent of the performance stock
vests on April 1, 2011, with the final vesting amount depending on the Companys total
shareholder return ranking relative to the total shareholder return for 12 identified
companies in a peer group. The Companys ranking must be greater than the 25th percentile
for any shares to vest, and the amount of shares that vests increases pro-rata for a ranking
greater than the 25th percentile up to a maximum vesting at the 75th percentile.
 
    
    Both performance share awards are subject to the recipients continued employment with
the Company, with vesting in a change of control and upon certain terminations without
cause.
   Type of Award
    
    Number of AwardsTime-vested awards
    
    
    1,293,000Absolute share price target awards
    
    
    512,000Total shareholder return awards
    
    
    512,000Management stock purchase plan awards
    
    
    150,000Company matching of management stock purchase plan awards
    
    
    150,000Total
    
    
    2,617,000
 Note 16  Accounting for Stock Based Compensation
   80




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##### Table of Contents



For the Years Ended September 30,2009
    
    
    2008
    
    
    2007(in thousands)Compensation expense
    
    $
    2,472
    
    
    $
    4,495
    
    
    $
    4,031Board compensation expense
    
    
    394
    
    
    
    307
    
    
    
    433Consulting expense
    
    
    89
    
    
    
    938
    
    
    
    502Total expense
    
    $
    2,955
    
    
    $
    5,740
    
    
    $
    4,966Compensation expense
    
    $
    2,866
    
    
    $
    4,802
    
    
    $
    4,464Reduction to both basic and diluted earnings per share from compensation expense
    
    $
    0.02
    
    
    $
    0.03
    
    
    $
    0.03
  For the Years Ended September 30,2009
    
    2008
    
    2007Risk-free interest rate
    
    0.69%  3.42%
    
    1.77%  3.54%
    
    3.97%  5.08%Expected volatility
    
    72.0%  73.0%
    
    53.0%  68.0%
    
    55.0%  58.0%Expected life (in years)
    
    1.50  8.00
    
    1.00  8.00
    
    0.50  6.50Dividend yield
    
    0.0%
    
    0.0%
    
    0.0%Forfeiture rate
    
    0.0%  15.0%
    
    0.0%  20.0%
    
    0.0%
   Shares
    
    
    Shares
    
    
    Shares AvailableReserved
    
    
    Outstanding
    
    
    for IssuanceAs of
    
    
    As of
    
    
    As ofSeptember 30,
    
    
    September 30,
    
    
    September 30,Name of Plan
    
    2009
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008(in thousands)1996 Stock Option Plan
    
    
    500
    
    
    
    15
    
    
    
    45
    
    
    
    
    
    
    
    2001 Stock Option Plan
    
    
    500
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    22003 Stock Option Plan
    
    
    500
    
    
    
    
    
    
    
    15
    
    
    
    
    
    
    
    2005 Stock Option Plan
    
    
    1,000
    
    
    
    126
    
    
    
    266
    
    
    
    69
    
    
    
    52006 Incentive Award Plan:Stock options
    
    
    8,000
    
    
    
    1,911
    
    
    
    2,900
    
    
    
    2,385
    
    
    
    803Restricted stock units
    
    
    
    
    
    
    1,625
    
    
    
    2,672
    
    
    
    
    
    
    
    2009 Incentive Award Plan:Stock options
    
    
    9,500
    
    
    
    190
    
    
    
    
    
    
    
    8,916
    
    
    
    Restricted stock units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,000
    
    
    
    3,867
    
    
    
    5,898
    
    
    
    11,372
    
    
    
    810Restricted stock units not from a plan
    
    
    789
    
    
    
    436
    
    
    
    125
    
    
    
    
    
    
    
    Options authorized by the Board of Directors,
for specific agreements
    
    
    410
    
    
    
    250
    
    
    
    500
    
    
    
    
    
    
    
    Options authorized by the Board of Directors,
not from a plan
    
    
    6,218
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,417
    
    
    
    4,553
    
    
    
    6,523
    
    
    
    11,372
    
    
    
    810
  81




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##### Table of Contents



Stock Options
    For the Years Ended September 30,2009
    
    
    2008
    
    
    2007(in thousands)Compensation expense
    
    $
    559
    
    
    $
    842
    
    
    $
    1,147Board compensation expense
    
    
    47
    
    
    
    89
    
    
    
    185Consulting expense
    
    
    72
    
    
    
    124
    
    
    
    502Total expense
    
    $
    678
    
    
    $
    1,055
    
    
    $
    1,834Compensation expense
    
    $
    606
    
    
    $
    931
    
    
    $
    1,332Reduction to both basic and diluted earnings per share from compensation expense
    
    $
    
    
    
    $
    0.01
    
    
    $
    0.01
  WeightedAverage
    
    
    AggregateNumber of
    
    
    Exercise
    
    
    IntrinsicShares
    
    
    Price
    
    
    ValueOutstanding at September 30, 2006
    
    
    4,370,000
    
    
    $
    2.47Granted
    
    
    661,000
    
    
    
    3.53Exercised
    
    
    (959,000
    )
    
    
    1.12Canceled / Expired
    
    
    (206,000
    )
    
    
    4.02Outstanding at September 30, 2007
    
    
    3,866,000
    
    
    
    2.91Granted
    
    
    395,000
    
    
    
    1.48Exercised
    
    
    (235,000
    )
    
    
    1.20Canceled / Expired
    
    
    (300,000
    )
    
    
    3.49Outstanding at September 30, 2008
    
    
    3,726,000
    
    
    
    2.82Granted
    
    
    270,000
    
    
    
    1.01Exercised
    
    
    (95,000
    )
    
    
    1.40Canceled / Expired
    
    
    (1,408,000
    )
    
    
    2.40Outstanding at September 30, 2009
    
    
    2,493,000
    
    
    
    2.91
    
    
    $
    255,000Options exercisable at September 30, 2009
    
    
    2,048,000
    
    
    $
    3.22
    
    
    $
    82,000Options exercisable at September 30, 2008
    
    
    2,974,000
    
    
    $
    2.85Options exercisable at September 30, 2007
    
    
    2,684,000
    
    
    $
    2.51Weighted average fair value of options granted during fiscal 2009
    
    
    
    
    
    $
    0.71Weighted average fair value of options granted during fiscal 2008
    
    
    
    
    
    $
    0.83Weighted average fair value of options granted during fiscal 2007
    
    
    
    
    
    $
    1.86
  82




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##### Table of Contents



Outstanding
    
    
    ExercisableWeighted Average
    
    
    Weighted
    
    
    
    
    
    
    WeightedRemaining
    
    
    Average
    
    
    
    
    
    
    AverageNumber
    
    
    Contractual Life
    
    
    Exercise
    
    
    Number
    
    
    ExerciseRange of Exercise Prices
    
    Outstanding
    
    
    in Years
    
    
    Price
    
    
    Exercisable
    
    
    Price$0.60-$0.77
    
    
    170,000
    
    
    
    5.93
    
    
    $
    0.65
    
    
    
    3,000
    
    
    $
    0.71$1.06
    
    
    15,000
    
    
    
    0.12
    
    
    
    1.06
    
    
    
    15,000
    
    
    
    1.06$1.33-$1.76
    
    
    670,000
    
    
    
    4.02
    
    
    
    1.50
    
    
    
    463,000
    
    
    
    1.47$1.85
    
    
    127,000
    
    
    
    0.82
    
    
    
    1.85
    
    
    
    127,000
    
    
    
    1.85$2.22-$2.68
    
    
    185,000
    
    
    
    4.93
    
    
    
    2.46
    
    
    
    155,000
    
    
    
    2.50$3.35-$3.81
    
    
    165,000
    
    
    
    4.32
    
    
    
    3.66
    
    
    
    148,000
    
    
    
    3.65$4.07-$4.48
    
    
    1,161,000
    
    
    
    5.86
    
    
    
    4.16
    
    
    
    1,137,000
    
    
    
    4.16$0.60-$4.48
    
    
    2,493,000
    
    
    
    4.91
    
    
    $
    2.91
    
    
    
    2,048,000
    
    
    $
    3.22
 Warrants
     83




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##### Table of Contents



For the Years Ended September 30,2009
    
    
    2008
    
    
    2007(in thousands)Compensation expense
    
    $
    190
    
    
    $
    
    
    
    $
    Board compensation expense
    
    
    
    
    
    
    
    
    
    
    Consulting expense
    
    
    
    
    
    
    814
    
    
    
    Total expense
    
    $
    190
    
    
    $
    814
    
    
    $
    Compensation expense
    
    $
    190
    
    
    $
    
    
    
    $
    Reduction to both basic and diluted earnings per share from compensation expense
    
    $
    
    
    
    $
    
    
    
    $
    
  84




---



##### Table of Contents



WeightedNumber of
    
    
    AverageShares
    
    
    Exercise PriceOutstanding at September 30, 2006
    
    
    11,159,000
    
    
    $
    1.61Granted
    
    
    4,018,000
    
    
    
    3.28Exercised
    
    
    (625,000
    )
    
    
    1.55Canceled / Expired
    
    
    
    
    
    
    Outstanding at September 30, 2007
    
    
    14,552,000
    
    
    $
    2.08Granted
    
    
    
    
    
    
    Exercised
    
    
    (1,142,000
    )
    
    
    1.16Canceled / Expired
    
    
    (2,067,000
    )
    
    
    1.60Outstanding at September 30, 2008
    
    
    11,343,000
    
    
    $
    2.30Granted
    
    
    6,994,000
    
    
    
    0.83Exercised
    
    
    
    
    
    
    Canceled / Expired
    
    
    (50,000
    )
    
    
    1.14Outstanding at September 30, 2009
    
    
    18,287,000
    
    
    $
    1.74Warrants exercisable at September 30, 2009
    
    
    18,287,000
    
    
    $
    1.74Warrants exercisable at September 30, 2008
    
    
    11,343,000
    
    
    $
    2.30Warrants exercisable at September 30, 2007
    
    
    14,552,000
    
    
    $
    2.08Weighted average fair value of warrants granted during fiscal 2009
    
    
    
    
    
    $
    0.32Weighted average fair value of warrants granted during fiscal 2008
    
    
    
    
    
    $
    Weighted average fair value of warrants granted during fiscal 2007
    
    
    
    
    
    $
    0.87
   Outstanding
    
    
    ExercisableWeighted Average
    
    
    Weighted
    
    
    
    
    
    
    WeightedRemaining
    
    
    Average
    
    
    
    
    
    
    AverageNumber
    
    
    Contractual Life
    
    
    Exercise
    
    
    Number
    
    
    ExerciseRange of Exercise Prices
    
    Outstanding
    
    
    in Years
    
    
    Price
    
    
    Exercisable
    
    
    Price$0.57 - $0.60
    
    
    3,250,000
    
    
    
    4.26
    
    
    $
    0.59
    
    
    
    3,250,000
    
    
    $
    0.59$0.92
    
    
    4,994,000
    
    
    
    3.38
    
    
    
    0.92
    
    
    
    4,994,000
    
    
    
    0.92$1.82
    
    
    2,083,000
    (1)
    
    
    2.25
    
    
    
    1.82
    
    
    
    2,083,000
    
    
    
    1.82$2.00
    
    
    2,942,000
    
    
    
    0.52
    
    
    
    2.00
    
    
    
    2,942,000
    
    
    
    2.00$2.41
    
    
    1,000,000
    
    
    
    4.28
    
    
    
    2.41
    
    
    
    1,000,000
    
    
    
    2.41$3.28
    
    
    4,018,000
    
    
    
    2.57
    
    
    
    3.28
    
    
    
    4,018,000
    
    
    
    3.28$0.57 - $3.28
    
    
    18,287,000
    
    
    
    2.82
    
    
    $
    1.74
    
    
    
    18,287,000
    
    
    $
    1.74
 
 (1)
    
    Composed of 2,083,000 shares underlying the warrants issued to East
Cliff Advisors, LLC. The aggregate intrinsic value of these shares was
$0 as of September 30, 2009. Restricted Stock Units and Performance Share Awards
    85




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##### Table of Contents



For the Years Ended September 30,2009
    
    
    2008
    
    
    2007(in thousands)Compensation expense
    
    $
    1,724
    
    
    $
    3,653
    
    
    $
    2,884Board compensation expense
    
    
    130
    
    
    
    218
    
    
    
    248Consulting expense
    
    
    
    
    
    
    
    
    
    
    Total expense
    
    $
    1,854
    
    
    $
    3,871
    
    
    $
    3,132Compensation expense
    
    $
    1,854
    
    
    $
    3,871
    
    
    $
    3,132Reduction to both basic and diluted earnings per share from compensation expense
    
    $
    0.01
    
    
    $
    0.02
    
    
    $
    0.02
  WeightedAverage
    
    
    AggregateNumber of
    
    
    Grant Date
    
    
    IntrinsicShares
    
    
    Fair Value
    
    
    ValueOutstanding at September 30, 2006
    
    
    1,589,000
    
    
    $
    4.60Granted
    
    
    665,000
    
    
    
    3.08Vested and Settled in Shares
    
    
    (412,000
    )
    
    
    4.25Vested and Surrendered for Withholding Taxes Payable
    
    
    (199,000
    )
    
    
    4.67Canceled / Expired
    
    
    
    
    
    
    Outstanding at September 30, 2007
    
    
    1,643,000
    
    
    
    4.07Granted
    
    
    2,355,000
    
    
    
    1.61Vested and Settled in Shares
    
    
    (758,000
    )
    
    
    3.26Vested and Surrendered for Withholding Taxes Payable
    
    
    (305,000
    )
    
    
    4.28Canceled / Expired
    
    
    (138,000
    )
    
    
    3.88Outstanding at September 30, 2008
    
    
    2,797,000
    
    
    
    2.21Granted
    
    
    445,000
    
    
    
    0.62Vested and Settled in Shares
    
    
    (707,000
    )
    
    
    2.93Vested and Surrendered for Withholding Taxes Payable
    
    
    (235,000
    )
    
    
    3.53Canceled / Expired
    
    
    (240,000
    )
    
    
    1.63Outstanding at September 30, 2009
    
    
    2,060,000
    
    
    
    1.53
    
    
    $
    3,338,000
     86




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##### Table of Contents



Stock Grants
  Note 17  Defined Contribution Plan
  Note 18  Income Taxes
    For the Years Ended September 30,2009
    
    
    2008
    
    
    2007(restated)(in thousands)Current:Federal
    
    $
    7
    
    
    $
    
    
    
    $
    State
    
    
    54
    
    
    
    13
    
    
    
    11Total Current
    
    
    61
    
    
    
    13
    
    
    
    11Deferred:Federal
    
    $
    
    
    
    $
    
    
    
    $
    State
    
    
    
    
    
    
    
    
    
    
    Total Deferred
    
    
    
    
    
    
    
    
    
    
    61
    
    
    
    13
    
    
    
    11
  87




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##### Table of Contents



For the Years Ended September 30,2009
    
    
    2008
    
    
    2007(restated)(in thousands)Federal income tax benefit calculated at the federal statutory rate
    
    $
    1,050
    
    
    $
    (19,340
    )
    
    $
    (32,180
    )State income tax benefit net of federal benefit
    
    
    227
    
    
    
    (1,207
    )
    
    
    (2,913
    )Permanent true ups, other
    
    
    127
    
    
    
    2,925
    
    
    
    125FIN 48
    
    
    (811
    )
    
    
    3,565
    
    
    
    Change in State Effective Rate
    
    
    (5,285
    )
    
    
    
    
    
    
    Research and development credit
    
    
    
    
    
    
    83
    
    
    
    1,073Change in valuation allowance
    
    
    4,753
    
    
    
    13,987
    
    
    
    33,906Income tax expenseFrom continuing operations
    
    $
    61
    
    
    $
    13
    
    
    $
    From discontinued operations
    
    
    
    
    
    
    
    
    
    
    11
  As of September 30,2009
    
    
    2008(restated)(in thousands)Current:Accruals for financial statement purposes not allowed for income taxes
    
    $
    6,949
    
    
    $
    4,105Basis difference in prepaid expenses
    
    
    (614
    )
    
    
    (749
    )Inventory
    
    
    (2,076
    )
    
    
    (3,230
    )Valuation allowance
    
    
    (4,259
    )
    
    
    (126
    )Current, net
    
    
    
    
    
    
    Long-Term:Net operating loss, capital loss and credit carryforwards
    
    $
    51,717
    
    
    $
    46,908Basis difference relating to Intangibles
    
    
    (2,673
    )
    
    
    811Basis difference in property, plant and equipment
    
    
    29,425
    
    
    
    31,193Stock option exercises FAS 123(R)
    
    
    5,860
    
    
    
    4,939Beneficial conversions of debt
    
    
    (178
    )
    
    
    (210
    )Impairment of available for sale securities
    
    
    1,177
    
    
    
    1,109Other items
    
    
    75
    
    
    
    30Valuation allowance
    
    
    (85,403
    )
    
    
    (84,780
    )Long-Term, net
    
    $
    
    
    
    $
    Total deferred tax assets, net
    
    $
    
    
    
    $
    
   Description
    
    Amount
    
    
    Expiration(in thousands)Net Operating Losses  US Federal
    
    $
    131,416
    
    
    2010  2028Net Operating Losses  States
    
    $
    131,362
    (1)
    
    2010  2028R&D Credit
    
    $
    2,755
    
    
    2010  2028AMT Credit
    
    $
    7
    
    
    NO EXP
 (1)
    
    $24,919,210 of CA and $41,081,310 of IL NOLs expire between 2010-2017 and 2018-2019
respectively.  88




---



##### Table of Contents

'

Tax Contingencies
   As of September 30,Reconciliation of Unrecognized Tax Liability
    
    2009
    
    
    2008(restated)(in thousands)Balance at beginning of year
    
    $
    5,460
    
    
    $
    1,556Additions based on tax positions taken during a prior period
    
    
    
    
    
    
    2,357Additions based on tax positions related to the current period
    
    
    397
    
    
    
    1,547Reductions based on tax positions related to the current period
    
    
    (3,103
    )
    
    
    Settlements with taxing authorities
    
    
    
    
    
    
    Lapse of statutes of limitations
    
    
    
    
    
    
    Balance at end of year
    
    $
    2,754
    
    
    $
    5,460
    Note 19  Segment Information
  
    
    Nitrogen products manufacturing  The Company manufactures a variety of nitrogen
fertilizer and industrial products.
 
    
    Alternative energy  The Company develops and markets processes for conversion of
low-value, carbon-bearing solids or gases into valuable hydrocarbons and electric power.
  89




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##### Table of Contents



For the Years Ended September 30,2009
    
    
    2008
    
    
    2007(in thousands)RevenuesNitrogen products manufacturing
    
    $
    182,762
    
    
    $
    210,293
    
    
    $
    131,816Alternative energy
    
    
    238
    
    
    
    678
    
    
    
    504Total revenues
    
    $
    183,000
    
    
    $
    210,971
    
    
    $
    132,320Operating income (loss)Nitrogen products manufacturing
    
    $
    57,048
    
    
    $
    52,736
    
    
    $
    13,222Alternative energy
    
    
    (43,172
    )
    
    
    (103,207
    )
    
    
    (107,685
    )Total operating income (loss)
    
    $
    13,876
    
    
    $
    (50,471
    )
    
    $
    (94,463
    )Depreciation and amortizationNitrogen products manufacturing
    
    $
    182
    
    
    $
    82
    
    
    $
    68Alternative energy
    
    
    1,296
    
    
    
    1,102
    
    
    
    731Total depreciation and amortization recorded in operating expenses
    
    $
    1,478
    
    
    $
    1,184
    
    
    $
    799Nitrogen products manufacturing  expense recorded in cost of sales
    
    
    8,280
    
    
    
    8,361
    
    
    
    7,720Total depreciation and amortization
    
    $
    9,758
    
    
    $
    9,545
    
    
    $
    8,519Interest expenseNitrogen products manufacturing
    
    $
    7,601
    
    
    $
    2,747
    
    
    $
    93Alternative energy
    
    
    3,449
    
    
    
    2,695
    
    
    
    2,337Total interest expense
    
    $
    11,050
    
    
    $
    5,442
    
    
    $
    2,430Income (loss) from continuing operationsNitrogen products manufacturing
    
    $
    49,264
    
    
    $
    50,958
    
    
    $
    11,869Alternative energy
    
    
    (46,308
    )
    
    
    (107,931
    )
    
    
    (106,736
    )Total income (loss) from continuing operations
    
    $
    2,956
    
    
    $
    (56,973
    )
    
    $
    (94,867
    )Total assetsNitrogen products manufacturing
    
    $
    115,030
    
    
    $
    158,653
    
    
    $
    108,266Alternative energy
    
    
    85,870
    
    
    
    46,092
    
    
    
    50,275Total assets
    
    $
    200,900
    
    
    $
    204,745
    
    
    $
    158,541
 Note 20  Net Income (Loss) Per Common Share
   For the Years Ended September 30,2009
    
    
    2008
    
    
    2007Basic net income (loss) per common share:Numerator:Income (loss) from continuing operations
    
    $
    2,956
    
    
    $
    (56,973
    )
    
    $
    (94,867
    )Income from discontinued operations
    
    
    72
    
    
    
    91
    
    
    
    3,150Net income (loss)
    
    $
    3,028
    
    
    $
    (56,882
    )
    
    $
    (91,717
    )Denominator:Weighted average common shares outstanding
    
    
    174,445
    
    
    
    165,480
    
    
    
    151,356Continuing operations
    
    $
    0.02
    
    
    $
    (0.34
    )
    
    $
    (0.63
    )Discontinued operations
    
    
    0.00
    
    
    
    0.00
    
    
    
    0.02Basic income (loss) per common share
    
    $
    0.02
    
    
    $
    (0.34
    )
    
    $
    (0.61
    )Diluted net income (loss) per common share:Numerator:Income (loss) from continuing operations
    
    $
    2,956
    
    
    $
    (56,973
    )
    
    $
    (94,867
    )Income from discontinued operations
    
    
    72
    
    
    
    91
    
    
    
    3,150Net income (loss)
    
    $
    3,028
    
    
    $
    (56,882
    )
    
    $
    (91,717
    )Denominator:Weighted average common shares outstanding
    
    
    174,445
    
    
    
    165,480
    
    
    
    151,356Effect of dilutive securities:Warrants
    
    
    508
    
    
    
    
    
    
    
    Common stock options
    
    
    15
    
    
    
    
    
    
    
    Restricted stock
    
    
    610
    
    
    
    
    
    
    
    Diluted shares outstanding
    
    
    175,578
    
    
    
    165,480
    
    
    
    151,356Continuing operations
    
    $
    0.02
    
    
    $
    (0.34
    )
    
    $
    (0.63
    )Discontinued operations
    
    
    0.00
    
    
    
    0.00
    
    
    
    0.02Diluted income (loss) per common share
    
    $
    0.02
    
    
    $
    (0.34
    )
    
    $
    (0.61
    )
  90




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##### Table of Contents



Note 21  Selected Quarterly Financial Data (Unaudited)
  First
    
    
    Second
    
    
    Third
    
    
    FourthQuarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter(As Restated)
    
    
    (As Restated)
    
    
    (As Restated)For the 2009 Fiscal YearRevenues (not restated)
    
    $
    50,077
    
    
    $
    16,789
    
    
    $
    91,417
    
    
    $
    24,717Gross profit (loss)
    
    $
    13,722
    
    
    $
    (11,135
    )
    
    $
    50,748
    
    
    $
    7,461Operating income (loss)
    
    $
    1,962
    
    
    $
    (22,077
    )
    
    $
    37,207
    
    
    $
    (3,216
    )Income (loss) from continuing operations
    
    $
    (273
    )
    
    $
    (24,723
    )
    
    $
    34,311
    
    
    $
    (6,359
    )Income from discontinued operations (not restated)
    
    $
    11
    
    
    $
    53
    
    
    $
    2
    
    
    $
    6Net income (loss)
    
    $
    (262
    )
    
    $
    (24,670
    )
    
    $
    34,313
    
    
    $
    (6,353
    )Net income (loss) per common share:Basic:Continuing operations
    
    $
    0.00
    
    
    $
    (0.15
    )
    
    $
    0.21
    
    
    $
    (0.03
    )Discontinued operations (not restated)
    
    $
    0.00
    
    
    $
    0.00
    
    
    $
    0.00
    
    
    $
    0.00Net income (loss)
    
    $
    0.00
    
    
    $
    (0.15
    )
    
    $
    0.21
    
    
    $
    (0.03
    )Diluted:Continuing operations
    
    $
    0.00
    
    
    $
    (0.15
    )
    
    $
    0.20
    
    
    $
    (0.03
    )Discontinued operations (not restated)
    
    $
    0.00
    
    
    $
    0.00
    
    
    $
    0.00
    
    
    $
    0.00Net income (loss)
    
    $
    0.00
    
    
    $
    (0.15
    )
    
    $
    0.20
    
    
    $
    (0.03
    )
 First
    
    
    Second
    
    
    Third
    
    
    FourthQuarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter(As Restated)
    
    
    (As Restated
    
    
    (As Restated
    
    
    (As Restated)For the 2008 Fiscal YearRevenues (not restated)
    
    $
    47,461
    
    
    $
    28,533
    
    
    $
    60,374
    
    
    $
    74,603Gross profit
    
    $
    10,360
    
    
    $
    7,835
    
    
    $
    17,567
    
    
    $
    20,789Operating income (loss)
    
    $
    (23,345
    )
    
    $
    (22,562
    )
    
    $
    (6,977
    )
    
    $
    2,412Loss from continuing operations
    
    $
    (23,355
    )
    
    $
    (22,894
    )
    
    $
    (7,794
    )
    
    $
    (2,930
    )Income from discontinued operations (not restated)
    
    $
    23
    
    
    $
    16
    
    
    $
    22
    
    
    $
    30Net loss
    
    $
    (23,332
    )
    
    $
    (22,878
    )
    
    $
    (7,772
    )
    
    $
    (2,900
    )Net loss per common share:Basic:Continuing operations
    
    $
    (0.14
    )
    
    $
    (0.14
    )
    
    $
    (0.05
    )
    
    $
    (0.01
    )Discontinued operations (not restated)
    
    $
    0.00
    
    
    $
    0.00
    
    
    $
    0.00
    
    
    $
    0.00Net loss
    
    $
    (0.14
    )
    
    $
    (0.14
    )
    
    $
    (0.05
    )
    
    $
    (0.01
    )Diluted:Continuing operations
    
    $
    (0.14
    )
    
    $
    (0.14
    )
    
    $
    (0.05
    )
    
    $
    (0.01
    )Discontinued operations (not restated)
    
    $
    0.00
    
    
    $
    0.00
    
    
    $
    0.00
    
    
    $
    0.00Net loss
    
    $
    (0.14
    )
    
    $
    (0.14
    )
    
    $
    (0.05
    )
    
    $
    (0.01
    )
  91




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##### Table of Contents



Summary Financial Impacts of Restatements
  Income
    
    
    
    
    
    
    Basic
    
    
    DilutedGross
    
    
    Operating
    
    
    (Loss) from
    
    
    Net
    
    
    Income
    
    
    IncomeProfit
    
    
    Income
    
    
    Continuing
    
    
    Income
    
    
    (Loss) per
    
    
    (Loss) per(Loss)
    
    
    (Loss)
    
    
    Operations
    
    
    (Loss)
    
    
    Share
    
    
    ShareQuarter ended June 30, 2009As previously reported
    
    $
    52,567
    
    
    $
    39,026
    
    
    $
    36,130
    
    
    $
    36,132
    
    
    $
    0.22
    
    
    $
    0.22Restatement adjustments
    
    
    (1,819
    )
    
    
    (1,819
    )
    
    
    (1,819
    )
    
    
    (1,819
    )
    
    
    (0.01
    )
    
    
    (0.02
    )As restated
    
    $
    50,748
    
    
    $
    37,207
    
    
    $
    34,311
    
    
    $
    34,313
    
    
    $
    0.21
    
    
    $
    0.20Quarter ended March 31, 2009As previously reported
    
    $
    (3,004
    )
    
    $
    (13,946
    )
    
    $
    (16,592
    )
    
    $
    (16,539
    )
    
    $
    (0.10
    )
    
    $
    (0.10
    )Restatement adjustments
    
    
    (8,131
    )
    
    
    (8,131
    )
    
    
    (8,131
    )
    
    
    (8,131
    )
    
    
    (0.05
    )
    
    
    (0.05
    )As restated
    
    $
    (11,135
    )
    
    $
    (22,077
    )
    
    $
    (24,723
    )
    
    $
    (24,670
    )
    
    $
    (0.15
    )
    
    $
    (0.15
    )Quarter ended December 31,
2008As previously reported
    
    $
    9,661
    
    
    $
    (2,099
    )
    
    $
    (4,334
    )
    
    $
    (4,323
    )
    
    $
    (0.03
    )
    
    $
    (0.03
    )Restatement adjustments
    
    
    4,061
    
    
    
    4,061
    
    
    
    4,061
    
    
    
    4,061
    
    
    
    0.03
    
    
    
    0.03As restated
    
    $
    13,722
    
    
    $
    1,962
    
    
    $
    (273
    )
    
    $
    (262
    )
    
    $
    0.00
    
    
    $
    0.00Quarter ended September 30,
2008As previously reported
    
    $
    14,784
    
    
    $
    (3,593
    )
    
    $
    (8,935
    )
    
    $
    (8,905
    )
    
    $
    (0.05
    )
    
    $
    (0.05
    )Restatement adjustments
    
    
    6,005
    
    
    
    6,005
    
    
    
    6,005
    
    
    
    6,005
    
    
    
    0.04
    
    
    
    0.04As restated
    
    $
    20,789
    
    
    $
    2,412
    
    
    $
    (2,930
    )
    
    $
    (2,900
    )
    
    $
    (0.01
    )
    
    $
    (0.01
    )Quarter ended June 30, 2008As previously reported
    
    $
    17,567
    
    
    $
    (6,977
    )
    
    $
    (7,794
    )
    
    $
    (7,772
    )
    
    $
    (0.05
    )
    
    $
    (0.05
    )Restatement adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    As restated
    
    $
    17,567
    
    
    $
    (6,977
    )
    
    $
    (7,794
    )
    
    $
    (7,772
    )
    
    $
    (0.05
    )
    
    $
    (0.05
    )Quarter ended March 31, 2008As previously reported
    
    $
    7,917
    
    
    $
    (22,480
    )
    
    $
    (22,812
    )
    
    $
    (22,796
    )
    
    $
    (0.14
    )
    
    $
    (0.14
    )Restatement adjustments
    
    
    (82
    )
    
    
    (82
    )
    
    
    (82
    )
    
    
    (82
    )
    
    
    
    
    
    
    As restated
    
    $
    7,835
    
    
    $
    (22,562
    )
    
    $
    (22,894
    )
    
    $
    (22,878
    )
    
    $
    (0.14
    )
    
    $
    (0.14
    )Quarter ended December 31,
2007As previously reported
    
    $
    10,278
    
    
    $
    (23,427
    )
    
    $
    (23,437
    )
    
    $
    (23,414
    )
    
    $
    (0.14
    )
    
    $
    (0.14
    )Restatement adjustments
    
    
    82
    
    
    
    82
    
    
    
    82
    
    
    
    82
    
    
    
    
    
    
    
    As restated
    
    $
    10,360
    
    
    $
    (23,345
    )
    
    $
    (23,355
    )
    
    $
    (23,332
    )
    
    $
    (0.14
    )
    
    $
    (0.14
    )
  92




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##### Table of Contents



Note 22  Related Party Transactions
   93




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##### Table of Contents



SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS
 Balance
    
    
    
    
    
    
    
    
    
    
    Balanceat Beginning
    
    
    Charged to
    
    
    Deductions and
    
    
    at Endof Period
    
    
    Expense
    
    
    Write-Offs
    
    
    of Period(in thousands)Year Ended September 30, 2009Allowance for doubtful accounts
    
    $
    692
    
    
    $
    
    
    
    $
    692
    
    
    $
    0Deferred tax valuation account
    
    $
    84,906
    
    
    $
    4,756
    
    
    $
    
    
    
    $
    89,662Reserve for REN earn-out
    
    $
    779
    
    
    $
    (73
    )
    
    $
    
    
    
    $
    706Year Ended September 30, 2008Allowance for doubtful accounts
    
    $
    126
    
    
    $
    566
    
    
    $
    
    
    
    $
    692Deferred tax valuation account
    
    $
    70,918
    
    
    $
    13,988
    
    
    $
    
    
    
    $
    84,906Reserve for REN earn-out
    
    $
    870
    
    
    $
    (91
    )
    
    $
    
    
    
    $
    779Year Ended September 30, 2007Allowance for doubtful accounts, from continuing operations
    
    $
    126
    
    
    $
    
    
    
    $
    
    
    
    $
    126Allowance for doubtful accounts, from discontinued operations
    
    
    10
    
    
    
    
    
    
    
    (10
    )
    
    
    Allowance for doubtful accounts
    
    $
    136
    
    
    $
    
    
    
    $
    (10
    )
    
    $
    126Deferred tax valuation account
    
    $
    35,995
    
    
    $
    34,923
    
    
    $
    
    
    
    $
    70,918Reserve for REN earn-out
    
    $
    1,000
    
    
    $
    (128
    )
    
    $
    (2
    )
    
    $
    870
 
 ITEM 9.
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures.
    94




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##### Table of Contents



Managements Report on Internal Control Over Financial Reporting.
 Internal Control  Integrated Framework
   Changes in Internal Control over Financial Reporting.
 Managements Plan for Remediation of the Material Weakness.
 
 ITEM 9B. OTHER INFORMATION
   95




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##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
  Code of Ethics
  
 ITEM 11. EXECUTIVE COMPENSATION
  
 ITEM 12.
    SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
  
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  
 PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
      96




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##### Table of Contents



SIGNATURES
  Rentech, Inc./s/  D. Hunt RamsbottomD. Hunt Ramsbottom,Chief Executive Officer and President   /s/  D. Hunt RamsbottomD. Hunt Ramsbottom,Chief Executive Officer, President and Director
(principal executive officer)  /s/ Dan J. CohrsDan J. Cohrs,Executive Vice President and Chief Financial Officer
(principal financial officer)  /s/ Eileen NeyEileen Ney,Vice President and Chief Accounting Officer
(principal accounting officer)  /s/  Dennis L. YakobsonDennis L. Yakobson,Chairman and Director  /s/  Michael S. BurkeMichael S. Burke,Director  /s/  Michael F. RayMichael F. Ray,Director   97




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##### Table of Contents



/s/  Edward M. SternEdward M. Stern,Director  /s/  Ronald M. SegaRonald M. Sega,Director  /s/  Halbert S. WashburnHalbert S. Washburn,Director  /s/  John A. WilliamsJohn A. Williams,Director   98




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##### Table of Contents



EXHIBIT INDEX
 2.1
    
    
    Stock Purchase Agreement, dated March 8, 2005, by and between Rentech, Inc. and Zinsser
Co., Inc. (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed
March 10, 2005).2.2
    
    
    Stock Purchase Agreement, dated November 5, 2005, by and between Rentech Development
Corporation and Royster-Clark, Inc. (incorporated by reference to Exhibit 2.1 to Current
Report on Form 8-K filed November 9, 2005).2.3
    
    
    First Amendment to the Stock Purchase Agreement dated November 5, 2005, by and between
Rentech Development Corporation and Royster-Clark, Inc. (incorporated by reference to
Exhibit 2.2 to Registration Statement on Form S-3 filed March 20, 2006).2.4
    
    
    Second Amendment to the Stock Purchase Agreement dated November 5, 2005, by and between
Rentech Development Corporation and Royster-Clark Nitrogen, Inc. (incorporated by
reference to Exhibit 2.1 to Current Report on Form 8-K filed March 14, 2006).2.5
    
    
    Third Amendment to the Stock Purchase Agreement dated November 5, 2005, by and between
Rentech Development Corporation and Royster-Clark Nitrogen, Inc. (incorporated by
reference to Exhibit 2.2 to Current Report on Form 8-K filed March 14, 2006).2.6
    
    
    Purchase and Sale Agreement, dated September 16, 2005, by and between Rentech Development
Corporation and RFC-Sand Creek Development, LLC (incorporated by reference to Exhibit 10.1
to Current Report on Form 8-K filed September 22, 2005).2.7
    
    
    Equity Purchase Agreement dated November 15, 2006 by and between Rentech, Inc. and PML
Exploration Services, LLC (incorporated by reference to Exhibit 2.1 to Current Report on
Form 8-K filed November 16, 2006).2.8
    
    
    Agreement and Plan of Merger, dated June 23, 2009 among Rentech, Inc., SilvaGas Holdings
Corporation, RTK Acquisition Sub, Inc., RTK Acquisition Sub, LLC, John A. Williams as the
Principal Stockholder, Milton Farris as the Stockholder Representative and the other
stockholders of the SilvaGas Holdings Corporation party thereto (incorporated by reference
to Exhibit 2.1 to Companys Current Report on Form 8-K filed on June 24, 2009).3.1
    
    
    Amended and Restated Articles of Incorporation, dated April 29, 2005 (incorporated by
reference to Exhibit 3(i) to Quarterly Report on Form 10-Q, for the quarterly period ended
March 31, 2005, filed May 9, 2005).3.2
    
    
    Articles of Amendment to Amended and Restated Articles of Incorporation of Rentech, Inc.
(incorporated by reference to Exhibit 3.1 to Quarterly Report on Form 10-Q, for the
quarterly period ended March 31, 2008, filed May 9, 2008).3.3
    
    
    Articles of Amendment to Amended and Restated Articles of Incorporation of Rentech, Inc.
(incorporated by reference to Exhibit 3.1 to Companys Current Report on Form 8-K filed on
May 22, 2009).3.4
    
    
    Bylaws dated November 30, 2004 (incorporated by reference to Exhibit 3(ii) to Annual
Report on Form 10-K for the year ended September 30, 2004 filed December 9, 2004).4.1
    
    
    Stock Option Agreement, dated December 10, 2004, by and between Rentech, Inc. and
Royster-Clark Inc. (incorporated by reference to Exhibit 10.8 to Current Report on Form
8-K filed December 16, 2004).4.2
    
    
    Stock Purchase Warrant, dated September 17, 2004, by and between Rentech, Inc. and
Mitchell Technology Investments (incorporated by reference to Exhibit 10.2 to Current
Report on Form 8-K filed September 23, 2004).4.3
    
    
    Registration Rights Agreement, dated September 17, 2004, by and between Rentech, Inc. and
Mitchell Technology Investments (incorporated by reference to Exhibit 10.3 to Current
Report on Form 8-K filed September 23, 2004).
  99




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##### Table of Contents



4.4
    
    
    Form of Stock Purchase Warrants, dated April 8, 2005, by and among Rentech, Inc. and
Mercator Momentum Fund, LP, Mercator Momentum Fund III, LP, Monarch Pointe Fund, Ltd.,
Pentagon Special Purpose Fund, Ltd. and M.A.G. CAPITAL, LLC, for Placement of Preferred
Stock (incorporated by reference to Exhibits 10.2, 10.3, 10.4, 10.5 and 10.6 to Current
Report on Form 8-K filed April 14, 2005).4.5
    
    
    Registration Rights Agreement, dated April 8, 2005, by and among Rentech, Inc. and
Mercator Momentum Fund, LP, Mercator Momentum Fund III, LP, Monarch Pointe Fund, Ltd.,
Pentagon Special Purpose Fund, Ltd. and M.A.G. CAPITAL, LLC, for Placement of Preferred
Stock (incorporated by reference to Exhibit 10.7 to Current Report on Form 8-K filed April
14, 2005).4.6
    
    
    Warrant to Purchase 1,000,000 Shares of Common Stock by and between Rentech, Inc. and DKRW
Advanced Fuels LLC, dated January 12, 2006 (incorporated by reference to Exhibit 2.1 to
Current Report on Form 8-K filed January 19, 2006).4.7
    
    
    Stock Purchase Warrants (incorporated by reference to Exhibits 10.1 through 10.16 to
Current Report on Form 8-K filed May 20, 2005).4.8
    
    
    Indenture dated April 18, 2006, by and between Rentech, Inc. and Wells Fargo Bank,
National Association, as Trustee (incorporated by reference to Exhibit 4.2 to Current
Report on Form 8-K filed April 18, 2006).4.9
    
    
    Officers Certificate to Indenture dated April 18, 2006 to Indenture (incorporated by
reference to Exhibit 4.3 to Current Report on Form 8-K filed April 18, 2006).4.10
    
    
    Form of 4.00% Convertible Senior Note Due 2013 (incorporated by reference to Exhibit 4.4
to Current Report on Form 8-K filed April 18, 2006).4.11
    
    
    Form of Subscription Agreement (incorporated by reference to exhibit 10.2 to Current
Report on Form 8-K filed April 20, 2007).4.12
    
    
    Form of Warrant to purchase shares of Common Stock (incorporated by reference to exhibit
10.3 to Current Report on Form 8-K filed April 20, 2007).4.13
    
    
    Form of Warrant to purchase shares of Common Stock (incorporated by reference to exhibit
10.2 to Current Report on Form 8-K filed January 20, 2009).4.14
    
    
    Warrant Agreement, dated June 23, 2009 between Rentech, Inc. and ClearFuels Technology
Inc. (incorporated by reference to exhibit 10.1 to Companys Current Report on Form 8-K
filed on June 24, 2009).4.15
    
    
    Stock Purchase Agreement, dated June 24, 2009, between Rentech, Inc. and the Buyers party
thereto (incorporated by reference to exhibit 10.1 to Companys Current Report on Form 8-K
filed on June 25, 2009).4.16
    
    
    Placement Agent Agreement, dated August 20, 2009 between Rentech, Inc. and Roth Capital
Partners, LLC. (incorporated by reference to exhibit 10.1 to Companys Current Report on
Form 8-K filed on August 21, 2009).4.17
    
    
    Form of Subscription Agreement (incorporated by reference to exhibit 10.2 to Companys
Current Report on Form 8-K filed on August 21, 2009).4.18
    
    
    Placement Agent Agreement, dated September 23, 2009 between Rentech, Inc. and Brean
Murray, Carret & Co., LLC. (incorporated by reference to exhibit 10.1 to Companys Current
Report on Form 8-K filed on September 23, 2009).4.19
    
    
    Form of Subscription Agreement (incorporated by reference to exhibit 10.2 to Companys
Current Report on Form 8-K filed on September 23, 2009).4.20
    
    
    Certificate of Incorporation of Rentech Energy Midwest Corporation (incorporated by
reference to exhibit 4.4 to Form S-3 filed March 27, 2009).4.21
    
    
    Bylaws of Rentech Energy Midwest Corporation (incorporated by reference to exhibit 4.5 to
Form S-3 filed March 27, 2009).
  100




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##### Table of Contents



4.22
    
    
    Articles of Incorporation of Rentech Development Corporation (incorporated by reference to
Exhibit 4.5 to Registration Statement on Form S-3 filed on March 20, 2006).4.23
    
    
    Bylaws of Rentech Development Corporation (incorporated by reference to Exhibit 4.6 to
Registration Statement on Form S-3 filed on March 20, 2006).4.24
    
    
    Articles of Incorporation of Rentech Services Corporation (incorporated by reference to
Exhibit 4.7 to Registration Statement on Form S-3 filed on March 20, 2006).4.25
    
    
    Bylaws of Rentech Services Corporation (incorporated by reference to Exhibit 4.8 to
Registration Statement on Form S-3 filed on March 20, 2006).4.26
    
    
    Articles of Organization of Rentech Energy Technology Center, LLC (formerly Sand Creek
Energy, LLC) (incorporated by reference to Exhibit 4.9 to Registration Statement on Form
S-3 filed on March 20, 2006).4.27
    
    
    Limited Liability Company Agreement of RSFC, LLC (incorporated by reference to exhibit
4.11 to Form S-3 filed March 27, 2009).4.28
    
    
    Limited Liability Company Agreement of RSFC Land Management, LLC (incorporated by
reference to exhibit 4.12 to Form S-3 filed March 27, 2009).10.1
    
    
    License Agreement, dated October 8, 1998, by and between Rentech, Inc. and Texaco Natural
Gas, Inc. (incorporated by reference to Exhibit 10.10 to Annual Report on Form 10-KSB, No.
000-19260, for the year ended September 30, 1998, filed January 13, 1999).10.2
    **
    
    Master License Agreement by and among Rentech, Inc. and DKRW Energy LLC and DKRW Advanced
Fuels LLC, dated January 12, 2006 (incorporated by reference to Exhibit 10.1 to Current
Report on Form 8-K filed January 19, 2006).10.3
    
    
    License Agreement by and between Rentech, Inc. and Medicine Bow Fuel & Power, LLC, dated
January 12, 2006 (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K
filed January 19, 2006).**10.4
    
    
    Amendment to Site License Agreement with Medicine Bow Fuel & Power, LLC, dated October 26,
2007 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed
November 1, 2007).10.5
    
    
    Omnibus Amendment by and among Rentech, Inc. and Medicine Bow Fuel & Power, LLC and DKRW
Advanced Fuels LLC, dated December 7, 2007 (incorporated by reference to Exhibit 10.1 to
Current Report on Form 8-K filed December 13, 2007).10.6
    *
    
    Amended and Restated Employment Agreement by and between Rentech, Inc. and D. Hunt
Ramsbottom, Jr. dated December 31, 2008 (incorporated by reference to Exhibit 10.43 to
Amendment No. 1 to Annual Report on Form 10-K/A filed January 28, 2009).10.7
    *
    
    Amended and Restated Employment Agreement by and between Rentech, Inc. and Douglas M.
Miller dated December 31, 2008 (incorporated by reference to Exhibit 10.44 to Amendment
No. 1 to Annual Report on Form 10-K/A filed January 28, 2009).10.8
    *
    
    Employment
Agreement by and between Rentech, Inc. and Dan J. Cohrs, dated October 22,
2008. (incorporated by reference to Exhibit 10.21 to Annual Report on Form 10-K
filed December 15, 2008)10.9
    *
    
    Amended and Restated Employment Agreement by and between Rentech, Inc. and Richard T.
Penning, dated December 31, 2008 (incorporated by reference to Exhibit 10.45 to Amendment
No. 1 to Annual Report on Form 10-K/A filed January 28, 2009).10.10
    *
    
    Employment Agreement with Colin Morris (incorporated by reference to exhibit 10.3 to
Companys Current Report on Form 8-K filed on November 6, 2009).10.11
    *
    
    Compensation Plan for Outside Directors (incorporated by reference to Item 1.01 to Current
Report on Form 8-K filed April 19, 2006).10.12
    
    
    Lease Agreement dated as of April 21, 2006 with Center West (incorporated by reference to
Exhibit 99.1 to Current Report on Form 8-K filed April 21, 2006).
  101




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##### Table of Contents



10.13
    
    
    Rider to the Lease Agreement dated as of April 21, 2006 by and between Rentech, Inc. and
Center West (incorporated by reference to Exhibit 99.2 to Current Report on Form 8-K filed
April 21, 2006).10.14
    *
    
    Form of Stock Option Grant Notice and Stock Option Agreement under 2006 Incentive Award
Plan (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed July
20, 2006).10.15
    *
    
    2005 Stock Option Plan (incorporated by reference to Exhibit 10.34 to Quarterly Report on
Form 10-Q for the fiscal quarter ended December 31, 2004 filed February 9, 2005).10.16
    *
    
    Amended and Restated Rentech, Inc. 2006 Incentive Award Plan (incorporated by reference to
Exhibit 10.1 to Current Report on Form 8-K filed March 29, 2007).10.17
    *
    
    First Amendment to Rentechs Amended and Restated 2006 Incentive Award Plan (incorporated
by reference to exhibit 10.1 to Companys Current Report on Form 8-K filed on November 6,
2009).10.18
    *
    
    Rentech, Inc. 2009 Incentive Award Plan (incorporated by reference to exhibit 10.1 to
Companys Current Report on Form 8-K filed on May 22, 2009).10.19
    *
    
    First Amendment to Rentechs 2009 Incentive Award Plan (incorporated by reference to
exhibit 10.2 to Companys Current Report on Form 8-K filed on November 6, 2009).10.20
    **
    
    Development Cost Sharing and Equity Option Agreement, dated May 25, 2007 by and between
Rentech, Inc. and Peabody Venture Fund, LLC (incorporated by reference to exhibit 10.1 to
Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 and filed on August 9,
2007).10.21
    **
    
    Coal Supply Agreement, dated May 25, 2007 by and between Rentech, Inc. and COALSALES LLC
(incorporated by reference to exhibit 10.1 to Quarterly Report on Form 10-Q for the
quarter ended June 30, 2007 and filed on August 9, 2007).10.22
    
    
    Line of Credit Agreement between Rentech, Inc. and Lehman Brothers, Inc. dated May 7, 2008
(incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q, for the
quarterly period ended March 31, 2008, filed May 9, 2008).10.23
    
    
    Credit Agreement, dated May 30, 2008, by and among Rentech Energy Midwest Corporation, as
the borrower, Rentech, Inc. and Credit Suisse, Cayman Islands Branch, individually and as
Administrative Agent and Collateral Agent (incorporated by reference to exhibit 10.1 to
Current Report on Form 8-K filed June 5, 2008).10.24
    
    
    Amended and Restated Credit Agreement, dated June 13, 2008, by and among Rentech Energy
Midwest Corporation, as the borrower, Rentech, Inc. and Credit Suisse, Cayman Islands
Branch, individually and as Administrative Agent and Collateral Agent (incorporated by
reference to exhibit 10.1 to Current Report on Form 8-K filed June 19, 2008).10.25
    
    
    First Amendment and Waiver to Amended and Restated Credit Agreement, dated January 14,
2009 by and among Rentech Energy Midwest Corporation, as the borrower, Rentech, Inc. and
Credit Suisse, Cayman Islands Branch, individually and as Administrative Agent and
Collateral Agent (incorporated by reference to exhibit 10.1 to Current Report on Form 8-K
filed January 20, 2009).10.26
    
    
    Waiver and
Amendment Letter, dated August 11,
2009 by and among Rentech Energy Midwest Corporation, as the borrower, Rentech, Inc. and
Credit Suisse, Cayman Islands Branch, individually and as Administrative Agent and
Collateral Agent.10.27
    
    
    Third Amendment and Waiver to Amended and Restated Credit Agreement, dated December 14,
2009 by and among Rentech Energy Midwest Corporation, as the borrower, Rentech, Inc. and
Credit Suisse, Cayman Islands Branch, individually and as Administrative Agent and
Collateral Agent.10.28
    
    
    Guarantee and Collateral Agreement, dated May 30, 2008, by and among Rentech Energy
Midwest Corporation, Rentech, Inc., the subsidiaries of Rentech, Inc. listed therein and
Credit Suisse, Cayman Islands Branch, as Collateral Agent (incorporated by reference to
exhibit 10.2 to Current Report on Form 8-K filed June 5, 2008).
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##### Table of Contents



10.29
    
    
    Reaffirmation and Amendment Agreement, dated June 13, 2008, by and among Rentech Energy
Midwest Corporation, Rentech, Inc., the subsidiaries of Rentech, Inc. listed therein and
Credit Suisse, Cayman Islands Branch, as Collateral Agent (incorporated by reference to
exhibit 10.3 to Current Report on Form 8-K filed June 19, 2008).10.30
    
    
    Intellectual Property Security Agreement, date May 30, 2008, by and among Rentech Energy
Midwest Corporation, Rentech, Inc., the subsidiaries listed therein and Credit Suisse,
Cayman Islands Branch, as Administrative Agent and Collateral Agent (incorporated by
reference to exhibit 10.3 to Current Report on Form 8-K filed June 5, 2008).10.31
    *
    
    Form of Absolute Share Price Target Performance Share Award Agreement (incorporated by
reference to exhibit 10.1 to Current Report on Form 8-K filed July 23, 2008).10.32
    *
    
    Form of Total Shareholder Return Performance Share Award Agreement (incorporated by
reference to exhibit 10.2 to Current Report on Form 8-K filed July 23, 2008).10.33
    *
    
    Form of Performance Vesting Restricted Stock Unit Agreement (incorporated by reference to
exhibit 10.1 to Current Report on Form 8-K filed November 23, 2009).10.34
    
    
    Form of Distribution Agreement by and between Rentech Development Inc. and Royster-Clark
Resources LLC (incorporated by reference to Exhibit 10.40 to Annual Report on Form 10-K
for the year ended September 30, 2005 filed December 9, 2005).**10.35
    
    
    Amendment to the Distribution Agreement, dated October 13, 2009 among Rentech Energy
Midwest Corporation, Rentech Development Corporation and Agrium U.S., Inc.14
    
    
    Code of Ethics (incorporated by reference to exhibit 14 to Companys Annual Report on Form
10-K for the fiscal year ended September 30, 2008 filed on December 15, 2008).21
    
    
    Subsidiaries of Rentech, Inc.23.1
    
    
    Consent of Independent Registered Public Accounting Firm.23.2
    
    
    Consent of Independent Registered Public Accounting Firm.31.1
    
    
    Certification of Chief Executive Officer Pursuant to Rule 13a-14 or Rule 15d-14(a).31.2
    
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14 or Rule 15d-14(a).32.1
    
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.32.2
    
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
 
 *
    
    Management contract or compensatory plan or arrangement.**
    
    Certain portions of this Exhibit have been omitted and filed
separately under an application for confidential treatment.  103